Alembic

We recommend a buy in the stock of Alembic from a short-term perspective. It is apparent from the charts that the stock has been on an intermediate-term uptrend since October 2008 low of Rs 24.7, which is a multi-year low. In early July, the stock found twin support at Rs 35, from the intermediate-term up trendline as well as key support level. Subsequently, the counter resumed its uptrend and has been on a medium-term uptrend too. On August 27, the stock broke through a significant resistance at Rs 45 by surging 8 per cent accompanied with high volume. Besides, it gained 7 per cent with high volume on September 23. The stock is trading well above its 21- and 50-day moving averages. The daily relative strength index (RSI) has entered the bullish zone and weekly RSI is featuring in this zone. The weekly moving average convergence and divergence indicator is steadily rising in the positive territory. We are bullish on the stock from a short-term horizon. We anticipate it to move up until it hits our price target of Rs 56. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 47.5.

via BL