Orchid Chemicals

We recommend a buy in the Orchid Chemicals & Pharmaceuticals from a short-term horizon. It is evident from the charts of Orchid Chemicals that after recording a multi-year low of Rs 56 in early March, it began to trend up. Since then, the stock has been on an intermediate-term uptrend, forming higher peaks and higher bottoms. The stock emphatically penetrated its 21 and 50-day moving averages during late March and is currently trading well above these averages. On May 25, the stock broke through a significant long-term resistance level of Rs 120 by gaining 9 per cent. We observe high volumes during the advance days of the uptrend, signalling strength in the current trend. The daily relative strength index (RSI) is featuring in the bullish zone and the weekly RSI has also entered into this zone. The daily moving average convergence and divergence is also hovering in the positive territory. We are bullish on the stock from a short-term perspective. We anticipate the stock to rally further until it hits our price target of Rs 144 in the approaching trading sessions. Traders with short-term trading perspective can buy the stock while maintaining a stop-loss at Rs 123.

via BL