Technical Analysis

Strides Pharma on an upward journey

Yoganand D | Updated on November 29, 2020 Published on November 29, 2020

Big batch of red, white, and blue medicine pills spilling out of a bigger red and blue capsule canister on white background   -  PeskyMonkey

A break above ₹800 can take it to ₹850, then to ₹900 in the short to medium term

Here are answers to readers’ queries on the performance of their stock holdings.

What is the short-term outlook of Strides Pharma? I would like to buy for a short-term horizon.

Ashish Pathrabe

Strides Pharma Science (₹764.1): Following a long-term sideways consolidation phase in the wide range between ₹290 and ₹530, the stock of Strides Pharma Science took support at around the lower boundary by registering a 52-week low at ₹268 in late March this year. Subsequently, the stock changed direction and began to trend upwards.

Since March low, the stock has been in an intermediate-term uptrend. While trending up, the stock had decisively breached a key long-term resistance at ₹530 in August this year and continued to trend upwards. After a brief corrective decline in late October and early November, the stock took support at ₹600 and resumed the uptrend. It trades well above the 21- and 50-day moving averages.

Last week, the stock surged 7.5 per cent with good volume, conclusively breaking above the vital short term barrier at ₹744. This rally has strengthened the intermediate-term uptrend.

The daily and the weekly relative strength indices are featuring in the bullish zone, backing the uptrend.

Besides, the daily as well as the weekly price rate of change indicators are hovering in the positive terrain, implying buying interest.

As a short-term perspective investor, you can buy the stock in declines with a stop-loss at ₹655. Going forward, the stock faces a crucial long-term barrier at ₹800. An emphatic break above this level can underpin the intermediate-term uptrend and take the stock northwards to ₹850 and then to ₹900 over the short to medium term time-frame. Next significant resistances are at ₹925 and ₹1,000. On the other hand, a strong decline below the immediate support level of ₹660 will alter the short-term uptrend and pull the stock down to ₹600. Subsequent supports are at ₹550 and ₹530 levels.

We have bought shares of South Indian Bank at a price of ₹33. What is the medium and long-term prospect of this stock?

K K Harris, Debraj Sengupta

South Indian Bank (₹7.57): The stock of South Indian Bank has been on a long-term downtrend since it had encountered a key resistance at ₹34 in early 2018.

This February, the stock breached a significant support level of ₹10 and continued to decline. But, after registering a multi-year low at ₹4.8 in late March, it started to move sideways. The stock took support at around ₹4.9 in May and started to trend upwards. Following a corrective decline, the stock found base at ₹6.25 in late October and resumed the up-move. It has gained about 11 per cent in the past week, surpassing a key resistance at ₹7.3. The stock now faces resistance at ₹8 and a strong breakthrough of the level can push it higher to ₹8.8 and then to ₹9.25.

Next key medium term resistance at ₹10 that needs to exceeded to strengthen the rally and take the stock northwards to ₹11.2 and then to ₹11.8-₹12 band in the medium to long term. A further rally beyond ₹12 can pave way for an up-move to ₹14 or ₹15 in the long run. You can average the stock with a stop-loss at ₹5.8 and consider exiting the stock either at ₹10 or ₹12 in the long term. A fall below ₹6 can drag the stock lower to ₹5.5 and then to ₹5.

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Published on November 29, 2020
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