Torrent Pharma shares gained more than 2 percent after a day of correction, and formed Bullish Harami kind of pattern on the daily charts with healthy volumes, on May 17. The stock still held not only its previous day's closing level but also previous day's low.
A Bullish Harami pattern is formed at the bottom of a downtrend or near a significant support zone. This pattern is made up of two candlesticks.
After hitting a high around Rs 1,680, the stock has been into consolidation for more than couple of weeks and has been struggling to break out from the same high. If the said level breaks out in coming days, then the stock can march towards its record high of Rs 1,750, experts feel.
Overall, the stock has been in a northward journey since after taking support at Rs 1,445 on March 1 this year. Momentum indicators RSI (relative strength index) at 66 levels showed positive trend and MACD (moving average convergence divergence) has already given a strong positive crossover above zero line on the weekly scale.
"Torrent Pharma is maintaining its bullish structure of higher top, higher bottom on the monthly charts, which shows strong positive undertone of the stock for the long term. On the weekly charts the stock has formed CIP (Change in Polarity) near Rs 1,450 levels indicating bullish outlook," Vidnyan Sawant, AVP - Technical Research at GEPL Capital said.
On the lower time frame like daily charts, the stock shows high volatility since past couple of days. The RSI indicator on the daily as well as weekly sustains above 55 level indicating positive momentum of the stock, he feels.
Immediate resistance for the stock placed at Rs 1,710 and Rs 1,750, whereas support zone stayed at Rs 1,600 and Rs 1,560 levels, Vidnyan said.
After reaching a record high of Rs 1,750 in November, the stock had corrected over 17 percent to take support at Rs 1,445, forming a bottom. Following this, the stock price started to recover in a V-shaped pattern. The stock price surpassed multiple moving averages in the previous month, including the 50-day, 100-day, and 200-day moving average.
Moreover, "a golden crossover occurred last week, which further bolstered the bullish sentiment for the stock. Currently, the stock price is struggling to break through Rs 1,680 levels. However, surpassing this level could trigger additional upward momentum and potentially test the previous high. In the meantime, the stock price finds reliable support around Rs 1,570 levels," said Foram Chheda, CMT, Technical Research Analyst and founder of ChartAnalytics.co.in.
Her next target for the stock would be Rs 1,710.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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