On the candlestick front, Alkem Labs has witnessed a 'Rising Three' formation on its daily scale which indicates the upmove to remain consistent & intact.
Sacchitanand Uttekar
On the daily scale, the ongoing bullish trend sequence since its recent swing base around 9,540 has developed into a 'Rising Wedge' formation, witnessing lack of momentum as it entered its final stages ahead of the breakdown. It has now slipped below its 5-DEMA while its RSI has been showcasing a clear negative divergence with its RS line cutting its average line near its overbought zone.
Derivative data saw significant unwinding in 10,700 strike price while 10,800 CE & 11,000 CE strike price witnessed fresh open interest additions pointing towards fresh call writing at a higher level.
Hence, its ideal to refrain from building fresh longs as upside from here on looks capped. Due to its overbought state fresh shorts are warranted only on a breakdown below 10,600-10,520 zone with a follow through move towards 10,380 during the week as the Rising Wedge pattern target coincides around 10,000 mark.
Here is the list of three stocks which can considered for buying/selling:
Bullish Harami formation on the monthly scale post the decline from its recent life high of Rs 2,879. Alkem Labs has been respecting its 200 DEMA zone well as it continued its oscillation near Rs 2,350-2,300. Ongoing oscillation resembles a contracting triangle which now looks mature for momentum. On the candlestick front, it has witnessed a 'Rising Three' formation on its daily scale which indicates the upmove to remain consistent & intact. Build longs with a stoploss below Rs 2,405 for a Pattern target of Rs 2,620.
Buy Torrent Pharma
Since the last 4 months, the stock has been oscillating within the broad range of Rs 2,350-2,600. The recent rebound from the lower end of the pattern support saw the occurrence of a 'Homing Pigeon' candlestick pattern warranting firm support around Rs 2,350. Pharma as a sector is expected to outperform again during these uncertain times & hence longs could be preferred even at this juncture in Torrent Pharma around Rs 2,400 with a stoploss below Rs 2,340 for a move towards Rs 2,620.
Weak sector outlook coupled with a breakdown below its critical support level of Rs 200. The stock has confirmed its Double Top formation now with its resistance firm at Rs 215. Its corresponding RSI breaking below its swing low indicates weakness to persist in the coming days. Stock has closed below its 5 DEMA & a move below its 20 DEMA which is placed around Rs 194 would amplify the momentum. Trading shorts could be considered with a stop loss at Rs 205 for an immediate target upto Rs 185-180.
The author is DVP – Technical (Equity) at Tradebulls Securities.
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