- The upside bounce in the Pharma stock Sun Pharma seems to have completed recently, as the stock price has reacted sharply on the downside during this week.
- We observe a formation of bearish candlestick pattern in the last couple of weeks (type of evening doji star-not a classical one) and this week’s decline could be a confirmation of a downward reversal in the trend.
- The stock price as per weekly timeframe was not able to surpass above the key multiple hurdle around Rs.570-575 levels (40 week EMA and the horizontal line resistance as per the concept of change in polarity) and reacted sharply on the downside from near that hurdle.
- We observe intermediate down trend in the stock price as per weekly timeframe over the last many months. The negative sequence of lower tops and bottoms have continued and the last week’s high of around Rs.572 levels could now be considered as a new lower top of the sequence. Hence one may expect further weakness from here.
- The overall chart pattern and momentum oscillator are showing negative indication in the stock price. One may look to create sell positions in Sun Pharma as per the levels mentioned above.
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Recommendation: HDFC Securities recommends investors to sell Sun Pharma between CMP of Rs527.50 & Rs568 for targets of Rs470/420 with a stop loss placed at Rs582 in 1-2 months.
Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.