Chart Check: SPARC up 40% from March 2023 lows; likely to hit fresh 52-week high

The stock rose from Rs 160.50 recorded on 21st March 2023 to Rs 229 as on 21st July 2023 which translates into an upside of 43%.

In terms of chart structure, the stock is retesting the breakout area of a head & shoulder pattern and a breach on the upside from a falling trendline resistance has given further momentum to the stock.

Short to medium-term traders can look to buy the stock for a possible target of 260-300 in the next 2-3 months.

The stock hit a 52-week high of Rs 265.75 on 9 November 2022 but it failed to hold on to the momentum. The stock found support above Rs 160 levels in March 2023.

The pharma stock with a market capitalization of more than Rs 7,000 crore gave a breakout from an Inverse Head & Shoulder pattern in August 2021 on the monthly charts.

The stock is now trading around the breakout zone which is likely to give support. On the daily charts, the stock is on the verge of making a golden cross pattern where the short-term moving averages (50-DMA) cross above the long-term moving average (200-DMA) from below.In terms of price action, the stock is trading above most of the short and long-term moving averages on the daily charts.

The daily Relative Strength Index (RSI) is at 63.8. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed. Daily MACD is above its center and signal line, this is a bullish indicator.

Agencies

“Sun Pharma Advanced Research stock has formed an inverted Head and shoulder pattern with a duration of 28 months, starting in the year 2019,” Kapil Shah, Technical Analyst, Emkay Global Financial Services and Trainer at FinLearn Academy, said.

“In the recent context, the stock is retesting the breakout level followed by a breach of the falling trendline which is a bullish continuation sign. The long-term moving average has also provided a cushion to fall in the stock,” he said.

“On the weekly chart, after forming a double bottom pattern, the stock has started to form a higher high and higher low sequence. On the daily chart, the stock has moved above long-term moving average and tracking short-term moving average very closely,” highlights Shah.

The stock has retraced to the mid-point of the expanded range candle followed by buying interest. “It is forming a potential flag pattern which is a bullish continuation sign. Based on the aforementioned rationale, the stock looks good to buy in the range of Rs 230 to Rs 220 with a stop loss of Rs 205 on a closing basis,” recommends Shah.

“On the higher side, the stock has immediate upside potential up to Rs 260 level, and in midterm it can improve up to Rs 300 level in 2-3 months,” he added.

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