Investors with a short term perspective can buy the stock of Alembic at current levels. The stock had encountered key resistance at around ₹120 in mid-September 2020 and was on a medium-term downtrend until it took support at ₹87 in early November. Subsequently, the stock changed direction triggered by positive divergence on the daily relative strength index. Since then, the stock has been on a short-term uptrend. After a minor dip in the past week, the stock took support at ₹92 and bounced up breaching the 50-day moving average.
On Monday, the stock gained 6.7 per cent accompanied by above-average volume, surpassing the 21-day moving average it closed at the key resistance level of ₹106 with a positive bias. The stock trades well above the 21- and 50-day moving averages. With the recent rally. the stock appears to have resumed the short-term uptrend.
The daily and the weekly relative strength indices have entered the bullish zone from the neutral region implying bullish momentum. Likewise, the daily as well as the weekly price rate of change indicators are featuring in the positive terrain implying buying interest. Overall, the short-term outlook is bullish for Alembic.
The stock has potential to trend upwards, surpassing the current resistance and reach the price targets of ₹111 and ₹113 in the forthcoming trading sessions. Traders can buy the stock with a stop-loss at ₹104.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)