Short-term traders can look to sell the stock for a possible target of Rs 620. Any rally towards Rs 667-680 can also be used as a selling opportunity, suggest experts.
The pharma major fell more than 5 per cent in a week which triggered the breakdown from a 50-point range where Rs 700 acted as a stiff resistance while levels of Rs 658-660 and above acted as strong support. The stock closed at Rs 652 on 26 August 2022.
On the price front, the stock is trading below 5,10,30 but above 50-DMA while it is trading below 100 and 200-DMA on the daily charts. is trading below 5 out of 9 oscillators, Trendlyne data showed.
The stock did bounce back earlier this month when it touched levels closer to Rs 600 on 4 August, but a recent breakdown suggests that bulls could take a back seat.
The Nifty50 has started to react from a strong resistance band. In its recent broader rise, the pharma sector has consistently underperformed.
“Among pharma stocks, Lupin is in a downtrend. With the recent relief rally, the stock reached the horizontal resistance line. It coincides with a falling slope of a positional moving average. Stock is at 50 per cent retracement of the previous fall,” Kapil Shah, Technical Analyst, Emkay Global Financial Services and Trainer – FinLearn Academy, said.
The stock had formed consolidation at resistance level accompanied with bearish reversal candles like Dark Cloud cover.
“Stock has breached the lower band of the consolidation patch which indicates a resumption of a bearish move. Momentum oscillator RSI is reacting from the overbought zone,” he said.
Shah recommends traders to go short in the range of Rs 667-680 for a target of Rs 620 in the next one month. A stop loss can be kept above Rs 700 on a closing basis.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)