Technical Analysis

Trading pick of the week: RPG Life Sciences

Yoganand D | Updated on April 26, 2020 Published on April 26, 2020

Investors with a medium-term perspective can buy the stock of RPG Life Sciences at current levels. The stock took support at around ₹150 in late March following a medium-term downtrend from the January high of ₹351.

Subsequently, in late March, the stock reversed direction, triggered by positive divergence in the daily price rate of change indicator. Since then, it has been in a short-term uptrend. The stock decisively breached a key resistance at ₹200 in early April and continued to trend upwards. But it met with the next resistance at ₹240, and has been testing this level for the past two weeks.

On Friday, the stock jumped 8 per cent, accompanied by above-average volume, and moved past the resistance at ₹240. The rally has surpassed the 200-day moving average and the stock trades well above the 21- and 50-day moving averages.

The daily relative strength index (RSI) has entered the bullish zone from the neutral region and the weekly RSI hovers in the neutral region.

Moreover, the daily price rate of change indicator features in the positive terrain, indicating buying interest, and the weekly indicator is on the brink of entering the positive terrain. Overall, the medium-term outlook is bullish for RPG Life Sciences.

Continuation of the uptrend can see the stock reach the price target of ₹295 in the medium term, with a minor pause at ₹275. Traders can buy with a stop-loss at ₹230.

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Published on April 26, 2020
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