Technical Breakout Stocks: Alembic Pharma, Dr Lal PathLabs & Zydus Wellness hit 52-week highs; what should traders do?

Sectorally, buying was seen in auto, power, PSU and utilities while some selling was seen in oil & gas, bank and realty stocks.

Stocks that hit fresh 52-week highs on Monday include names like Alembic Pharmaceuticals which rose nearly 4%, Zydus Wellness that closed with gains of 3.6% and Dr Lal PathLabs was up 2.4%.

We spoke to an analyst on how one should look at these stocks the next trading day entirely from an educational point of view.


Here’s what Kush Ghodasara (CMT, SEBI RA : INH000002137) has to say:

The stock had been trading in the range of 847-1090 since February while on Monday we witnessed a breakout in the north with heavy volumes.


The short-term moving average has given crossover to the medium-term average signaling a but for near term.


The Relative Strength Index (RSI) has approached the overbought zone, but MACD is still signalling some strength. The stock can be bought with the stop loss at 1,031 which is 10-day average for the targets of 1,280.

The stock has been trading in an upside channel since the low recorded in June and simultaneously it is taking support at its 10-day average.


But the RSI has already approached the overbought zone for quite some time and now I believe the top is nearby.


Even MACD has been strong for quite some time now and is expected to fizzle out.


We don't recommend buying a new position, but existing positions can be booked out around 3,150, which is a resistance to the channel line.

The stock has shown some strength in the last two sessions and has also witnessed a breakout, but I believe we have approached a resistance to a broadening formation, which suggests traders can look to exit long positions.


Even the indicators are into an overbought zone suggesting a stop to the previous rally. Therefore, we suggest traders exit long positions and sit on the sideline.



(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)