Biocon may test Rs 530-540: Amit Gupta

Amit Gupta of ICICIdirect told CNBC-TV18, "This has become a market where whenever a substantial profit booking comes in a good stock then we should be the buyer because if we start buying in the momentum then we get stuck up. We have seen that in the last three-four months."

"Biocon has already seen around 10-12 percent of profit booking from Rs 520 to Rs 470-460 now. We have seen that structurally because if you look from the F&O segment perspective, the futures buyers are still intact in the stock because the open interest (OI) is at a life high in Biocon right now and when it came down, we saw that after the last quarterly results, it had a breakdown from Rs 505 to Rs 460. Since then for the last one month, it has been absorbing that kind of selling pressure in the market. Again we are seeing the long positions are getting added up in the stock and that is why the OI rather than declining is climbing higher. That is the reason this stock eventually should start moving up," he added.

"If you look at the particular moving average that is hundred days moving average, it has been following pretty nicely for the last six-seven months, so that average also was placed around Rs 465-470 levels, from there it has found support and it started moving up. So Rs 465-470 will remain an important support area and it should inch higher towards Rs 530-540 in the months to come."