Buy Alkem Laboratories in the range of Rs. 2650.00-2710.00 for target price of Rs. 3090.00 with a stop loss of Rs. 2398.00. Time Frame: Six months
Pharma space continues to remain as the key outperformer since equity market bottoming out in March 2020. The share price of Alkem Laboratories remain in strong up trend and has generated a breakout above the last 11 weeks consolidation range (Rs. 2580-2222) signalling resumption of up move and offers fresh entry opportunity.
Structurally the stock has recently rebounded forming a higher base at the rising 52 weeks EMA (Rs. 2295) as can be seen in the adjacent chart. Time wise it has already taken 13 weeks to retrace just 61.8% of previous six weeks rally (1882-2879). A slower retracement and a higher base at the 52 weeks EMA highlights a robust price structure.
Weekly MACD sustaining in positive territory and is at the cusp of generating a buy signal moving above its nine periods average thus validates positive bias.
We expect the stock to continue with its up move and head towards Rs. 3090 levels in the medium term as it is the 138.2% external retracement of the previous decline (Rs. 2879-2222) placed at Rs. 3090.
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