Technical Analysis

Tech Query: Should I hold AstraZeneca Pharma India stock?

Yoganand D BL Research Bureau | Updated on July 24, 2021

Please give me the long-term outlook of AstraZeneca and Procter & Gamble Health bought at ₹3,500 and ₹5,450, respectively.

S Sankaran

AstraZeneca Pharma India (₹3,498): The stock had come up against a medium-term barrier at ₹4,500 in late April this year and failed to move beyond this level. Subsequently, it resumed the downtrend that had started from the high of ₹4,910 this January. Since then, the stock has been in an intermediate-term downtrend.

Nevertheless, the stock now tests support at ₹3,500 levels. A slump below this base can reinforce the bearish momentum and pull the stock down to the next vital base level of ₹3,250 and then to ₹3,000 levels over the medium term. An emphatic plunge below the long-term support level of ₹3,000 will drag the stock down to ₹2,500 and then to ₹2,000 over the long run. That said, an upward reversal from the current support of ₹3,000 can take the stock higher to ₹3,800 initially and then to ₹4,000 levels. A decisive break above ₹4,000 can pave the way for an up-move to ₹4,500 levels. You can exit and buy at lower level or average at lower level with a stop-loss at ₹2,900 levels.

Procter & Gamble Health (₹5,491.9): The stock of Procter & Gamble Health has been on a medium-term downtrend since it encountered resistance at ₹7,500 in early February this year. While trending down, the stock took support at ₹6,000 in late March and witnessed a corrective up-move that was shortlived. The stock failed to rally beyond the key barrier at ₹6,400 in late April and plummeted, breaching the support level of ₹6,000 in May. Thereafter it continued to trend downwards and has been in a short-term downtrend since then. The stock trades well below the 21- and 50-day moving averages. Both the daily and the weekly relative strength indices are featuring in the bearish zone, backing the downtrend.

The stock can extend the downtrend and test support at ₹5,000 in the ensuing weeks. The level of ₹5,000 is a significant long-term support that can cushion the stock. An upward reversal from this base can take it higher to ₹6,000. A strong breakthrough of the resistance at ₹6,000 is needed to alter the short-term downtrend and take the stock higher to ₹6,400 levels. Next resistance is at ₹6,600. To alter the medium term downtrend the stock needs to move beyond ₹6,600 levels. In that case, an up-move to ₹7,000 and then to ₹7,500 is possible over the long term. You can consider averaging the stock at lower level with a stop-loss at ₹4,900 levels. Key supports below ₹5,000 are placed at ₹4,800 and then ₹4,500 levels.

Published on July 24, 2021

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