The stock of Cadila Healthcare gained 3 per cent on Tuesday, reinforcing the bullish momentum. Investors with a short-term view can consider buying the stock at current levels.

After a corrective decline from the new high of ₹497 registered in early May, the stock found support at its key long-term base zone between ₹430 and ₹440 last week. Subsequently, the stock bounced up forming a bullish engulfing candlestick pattern at this key support zone.

This pattern a bullish reversal pattern that has bullish implication. Extending the up move the stock gained 3 per cent and breached its 21 as well as 50-day moving average on Tuesday. With this rally, the stock appears to have resumed its medium-term uptrend that has been in place since January 2017 low of ₹334. The daily relative strength index is moving higher in the neutral region towards the bullish zone and the weekly RSI re-entered the bullish zone, strengthens the uptrend.

Both the long and intermediate-term trends are up for the stock. The short-term outlook is bullish. The stock can continue its up move and reach the price targets of ₹488 and ₹498 in the forthcoming trading sessions. Buy the stock with a stop-loss at ₹460.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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