Investors with a medium-term perspective can buy the stock of Eris Lifesciences at current levels. On Friday, the stock jumped 7.8 per cent, accompanied by good volume, breaking above a key resistance as well as the horizontal line of ascending triangle pattern. Generally, the ascending triangle pattern in an uptrend is a continuation pattern. But when the ascending triangle pattern forms at the end of a downtrend, it is a reversal pattern. In this case, the ascending triangle pattern had been in formation since early September.

The top horizontal line at ₹450 had capped the upside until last week. The recent break above the key level of ₹450 confirms the pattern. Following an intermediate-term downtrend, the stock recorded a 52-week low at ₹357 in late August and began to trend upwards. Since then, the stock has been in a medium-term uptrend. In late November, it breached its 21- and 50-day moving averages and continued to trend upwards. The daily relative strength index (RSI) has entered the bullish zone from the neutral region, and the weekly RSI features in the neutral region. Further, the daily as well as the weekly price rate of change indicators are hovering in the positive terrain, implying buying interest.

The recent pattern break-out has strengthened the medium-term uptrend, and the stock has the potential to trend upwards in the ensuing weeks.

With a minor pause at ₹520, it can reach the price target of ₹550 in the medium term. Traders can buy with a stop-loss at ₹442.

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