We recommend a buy in the stock of Biocon from a short-term perspective. It is evident from the charts of the stock that it has been on an intermediate-term uptrend since taking support at Rs 210 in June 2012. The stock recently took support at around Rs 265 this January and March and started moving higher. The stock’s 200-day moving average also provided a base at around this level.
On Monday, the stock jumped 4 per cent with good volume breaching its key immediate resistance as well as 21- and 50-day moving averages. We observe that there has been an increase in daily volume in the past three trading sessions. With this up-move the stock appears to have resumed its intermediate-term uptrend. It is hovering well above its 50- and 200-day moving averages. The daily relative strength index has entered the bullish zone from the neutral region and weekly RSI is on the brink of entering the bullish zone from the neutral region. Both daily and weekly price rate of change indicators are featuring in the positive territory implying buying interest. Our short-term outlook on the stock is bullish. We expect its up move to continue and reach our price target of Rs 301 or Rs 307 in the forthcoming trading sessions. Traders with a short-term perspective can consider buying the stock with stop-loss at Rs 283.5 level.
( Note: This recommendation is based on technical analysis. There is a risk of loss in trading.)