The short-term outlook is bullish for Divi’s Laboratories. The price action since December indicates a flag pattern formation. This is a bullish continuation pattern. The 5 per cent surge on Thursday confirms the breakout of this pattern. Support is now in the ₹5,900-5,800 region which can limit the downside. Intermediate dips are likely to see fresh buyers coming into the market around this support zone.
Divi’s Laboratories share price can rise to ₹7,300 in a month or two. Traders can buy Divi’s Laboratories now at ₹6,215. Accumulate on dips at ₹6,110. Keep the stop-loss at ₹5,760. Trail the stop-loss up to ₹6,350 as soon as the stock goes up to ₹6,550. Move the stop-loss further up to ₹6,650 and ₹6,850 when the share price touches ₹6,800 and ₹7,000 respectively. Exit the long positions at ₹7,100.
Note: The recommendations are based on technical analysis. There is risk of loss in trading