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Taking a contrarian stance the short-term outlook for the stock of Sun Pharmaceutical Industries appears bullish after a strong 6.6 per cent-rally on Tuesday. Investors with a short-term horizon can buy the stock at current levels.
Following a short-term downtrend from the January high of ₹462, the stock recorded a low of ₹363 on Monday and found support at this levels. Triggered by positive divergence in the daily relative strength index and the price rate of change indicator, the stock changed direction and rallied last session. There has been an increase in daily volume over the past one week.
The recent rally has decisively breached an immediate resistance at ₹380, showing signs of initial bullishness. Moreover, the daily RSI has entered the neutral region from the bearish zone and the weekly RSI has also entered the neutral region. Both the daily as well as the weekly price rate of change indicator are charting upwards.
The short-term appears bullish for the stock from a contrarian perspective. The stock can trend upwards are reach the price targets of ₹410 and ₹417 in the forthcoming trading sessions. Traders can buy with a stop-loss at ₹385.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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