Today’s pick is SUNPHARMA [stockquote]SUNPHARMA[/stockquote]. The stock has been on an uptrend since the start of the year. After finding resistance at Rs. 550 for a couple of months, it started its up June. It saw its 52 weeks high of Rs. 826 towards February end. Since then it is trending down. In the last three months, the stock moved +11% Vs. -2% of the Nifty’s.

SUNPHARMA Technical Analytis Chart

Oscillator RSI and CMO are currently drawing back from the over-bought territory; a corrective move. The stock is currently trading in the middle of the Bollinger bands.

The MACD line has just punctured the signal line in a bearish move accompanied with a downward moving histogram is signaling a short-term trend reversal. However, the Long-term GMMA lines are expanding suggesting a bullish outlook for the long-term.

SUNPHARMA correlation chart

SUNPHARMA’s average correlation with the Nifty is 0.41 which is positive. The scrip will be replicating movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

SUNPHARMA volatility chart

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

Given these technicals, we suggest a short-term SELL. A long-term BUY is suggested given the long-term trend-line in place. It is also suggested to have a relaxed trailing stop-losses levels to book profits in case of a trend-reversal.

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