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Investors with a short-term horizon can buy the stock of Sun Pharma Advanced Research Company (SPARC) at current levels. Following a medium-term downtrend between January and early April this year, the stock found support at around ₹141 in April and reversed direction triggered by positive divergence. Since then, the stock has been in a medium-term uptrend, forming higher peaks and troughs.
Last week, the stock took support at ₹230 and bounced up, resuming the uptrend. Subsequently, the stock extended the uptrend and breached a key barrier at ₹265. After a minor pause, the stock jumped 5.3 per cent with above average volume on Thursday. This rally has surpassed the next hurdle at ₹280 levels. The stock trades well above the 21- and 50-day moving averages. There has been an increase in volume over the past one week.
The daily and the weekly relative strength index (RSI) are featuring in the bullish zone backing the uptrend. With the recent pick up in bullish momentum, the stock has potential to extend the up-move in the short term. It can reach the price targets of ₹300 and ₹306 in the forthcoming trading sessions. Traders can buy the stock with a stop-loss at ₹282 levels.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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