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The outlook for the stock of Cipla is bullish. The stock rose 2.5 per cent on Monday breaking above a key resistance level of ₹639. This has strengthened the short-term uptrend that has been in place since June this year.
The strong breakout also gives an initial indication that the prolonged sideways consolidation in this stock that has been in place for more than a year could have ended. The level of ₹639 will now serve as a good support. Dips to this level may now find fresh buyers coming into the market. The next key support is at ₹619. The 100-day moving average is on the verge of crossing over the 200-day moving average. This backs the bullish outlook and suggests that the downside could be limited in the short-term. A rally to ₹700 is likely in the coming days.
Short-term traders can go long. Stop-loss can be placed at ₹625 for the target of ₹690. Accumulate longs on dips near ₹645. Revise the stop-loss higher to ₹660 as soon as the stock moves up to ₹670.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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