Long-term investors can buy the shares of Natco Pharma (₹629.35) at current levels. This stock has been in a strong downtrend since July 2021. The rise from the low of ₹502 made in February this year is giving a good sign of a trend reversal. This upmove began from a strong long-term trend line support poised around ₹500.
On the weekly chart, moving average cross-over is also strengthening the case for a trend reversal. These factors confirm that a new leg of a long-term rally in Natco Pharma’s stock has begun.
Immediate support is in the ₹605-595 region. Below that, ₹565 is the next important support zone. Resistance is in the ₹695-715 region. This can be tested in the next few weeks. A corrective fall from there will be short-lived and limited to ₹630.
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An eventual break above ₹715 will see Natco Pharma’s share price targeting ₹1,000 over the next year. That will also keep the doors open to test ₹1,200-1,300 by the end of 2024 or in early 2025.
Investors can buy now. Accumulate on dips at ₹595. Keep the stop-loss at ₹480. Trail the stop-loss up to ₹660 when the price moves up to ₹740. Move the stop-loss further up to ₹840 when Natco Pharma’s share price touches ₹1,020. Exit the stock at ₹1,200.
The bullish outlook will get negated only if the share price declines below ₹500. In that case, a fall to ₹380 can happen.