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The stock of Wockhardt jumped 6 per cent accompanied by above average volume last Friday, breaching an immediate resistance at ₹286.
However, it now tests the next key resistance at ₹300 with a positive bias.
Investors with a medium-term perspective and high appetite for risk can buy the stock at current levels.
Following a long-term downtrend, the stock found support at ₹231 in September 2019. Since then, it has been in a sideways consolidation phase.
The downside was capped well by the significant medium-term support at around ₹230 in last December and this January.
Subsequently, the stock changed direction, triggered by positive divergence in the daily price rate of change indicator. The stock has been in a short-term uptrend since early January.
While trending up, it breached the 21- and 50-day moving averages, and trades well above them.
There has been an increase in the weekly volume over the past two weeks.
The daily relative strength index (RSI) features in the bullish zone and has reached the overbought territory.
The weekly RSI features in the neutral region. Besides, the daily as well as the weekly price rate of change indicators feature in the positive terrain, signifying buying interest.
Overall, the medium-term outlook is bullish for Wockhardt. An emphatic break above the resistance level of ₹300 will pave the way for an up-move to ₹330 and then to ₹350 in the medium term. Traders can buy with a stop-loss at ₹275.
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