Analysis: RANBAXY

Today’s pick is RANBAXY. [stockquote]RANBAXY[/stockquote]. The stock was in a constant uptrend since March. However, a couple of weeks ago it exhibited a double top, and closed down below the existing trend line, suggesting a stop of the trend. In the last three months, the stock is down -6% against 11% rise of Nifty’s.


Oscillators RSI and CMO are at currently at 46 and -21 are close to the over-sold territory, but are not directing the stock upwards.

MACD line and signal line are moving parallel to each other and are not suggesting any direction for the stock.

The long-term and short-term GMMA lines are running very close to each and hence are of not much use currently in suggesting any particular direction.

Short-term technical just saw a 4X9 bullish cross over for the stock.


RANBAXY’s average correlation of 0.42 with the Nifty is positive. The stock will not replicate the movements of Nifty closely. [stockquote]NIFTYBEES[/stockquote]


RANBAXY has a historical volatility in the range of 0.3 to 0.7. The scrip’s volatility is currently in the lower side of the range.

Looking at these technicals the stock is short-term buy. A medium term hold is suggested because of the direction-less movement of the stock. A longer term call could be taken based on the stocks behavior around the base of the last double top (which will be acting as a resistance level).

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