Todays Pick

Sun Pharmaceutical Industries (₹577.7)

Gurumurthy K BL Research Bureau | Updated on January 09, 2018 Published on December 27, 2017

The outlook for the stock of Sun Pharmaceutical Industries is bullish. The stock surged 6.9 per cent on Wednesday and has closed on a strong note. This strong rally has taken the stock well above the 200-day moving average at ₹561 and a trendline resistance at ₹564. These two levels may now serve as a good short-term support. Additionally, the decisive break above ₹564 confirms an inverted head and shoulder pattern on the chart. This is a bullish reversal pattern. So, intermediate dips to ₹564 and ₹561 is more likely to find fresh buyers coming into the market.

A rally to ₹600 and ₹620 looks likely in the coming days. Short-term traders can go long at current levels and also accumulate on dips at ₹570 and ₹565. Stop-loss can be placed at ₹555 for the target of ₹615. Revise the stop-loss higher to ₹585 as soon as the stock moves up to ₹600. The bullish outlook will get negated only if the stock declines below ₹561 decisively. In such a scenario, the stock can move down towards ₹540, ₹530 or even lower levels thereafter. However, such a fall breaking below ₹561 looks less probable at the moment.

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

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