Analysis: LUPIN

Today’s pick is LUPIN [stockquote]LUPIN[/stockquote]. The stock has been on an uptrend since the start of the year. It reached its 52 week’s high of Rs. 622 in the month of September. It is currently under long term pennant formation. In the last three months, the stock moved +2% vs. a flat Nifty.

LUPIN Technical Analysis Chart

Oscillator RSI and CMO are currently in no-man’s land. The stock is currently trading in the upper range of the Bollinger bands. Short-term technical just saw a 9X18 bullish cross-over.

The MACD line has bullishly penetrated the signal line after very long. However, the Long-term and short-term GMMA lines are moving very close to each other without giving any directional bias to the stock.

LUPIN Correlation chart

LUPIN’s average correlation with the Nifty is 0.29, which is positive. The scrip will be replicating movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

LUPIN Volatility chart

LUPIN has a historical volatility in the narrow range of 0.2 to 0.7. The scrip’s volatility is currently in the lower end of the range.

Given the technicals, we suggest a short-term buy. A long-term call could be taken depending on the directional break-out of the pennant. Also, it is advisable to have a relaxed trailing stop-losses level to book profits in case of a trend-reversal.

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