Technical Check: This mid cap pharma stock looks set for a reversal after 20% fall from its 52-week high

Dishman Carbogen Amcis Ltd has fallen into a bear territory from its recent 52-week highs. It is still up over 40 per cent for the year as compared to 21 per cent upside seen in the Nifty50 in the same period.

The pharma company stock with a market capitalisation of over Rs 3,000 cr was down by about 24 per cent to Rs 197 as on 22 October from its recent 52-week high of Rs 259.50 recorded on 7 October.

See Zee Business Live TV Streaming Below:

Theoretically, a stock is said to be in a bear territory when the price falls 20 per cent or more from the recent high.

Shares of Dishman Carbogen managed to bounce back after hitting a low of Rs 185 on 20 December and has managed to close above the 200-Days EMA placed at 191.60 on the daily charts which is a positive sign for the bulls.

Experts are of the view that a close above the 200-Days EMA is a sign of strength and investors can look at a short-term target of Rs 240-255 in the next 2-3 months. This translates into an upside of about 30 per cent from Rs 197 recorded on 22 December.

Dishman Carbogen Amcis Ltd is a fully integrated CRAMS (Contract Research & Manufacturing) company with strong capabilities right from process research and development to late-stage clinical and commercial manufacturing and supply of API to innovator pharmaceutical companies.

Dishman offers services to the pharmaceutical and biopharmaceutical industries with drug development and has been in the business for over 30 years in developing and bringing new drugs to the market.

From a shareholding perspective, both foreign investors and mutual funds have decreased their stake in the September quarter, data from Trendlyne showed.

Foreign Institutional Investors have decreased their holding in Dishman from 5.91 per cent sequentially to 4.4 per cent for the quarter ended September.

Technically, the stock is trading below the crucial short-term moving averages such as 30, 50, and 100-Days Moving Average but above the long-term moving average of 200-DMA.

The stock has indicated decent swings at regular intervals giving the opportunity to the short-term traders and would be a perfect midcap stock at this current juncture for fresh entry and expect decent returns, suggest experts.

“The stock has eroded much of its gain in the past one month from the peak level of around 258 and has slipped down to touch the trendline support zone of 185 level and showing signs of bottoming out in the daily chart,” Vaishali Parekh, Vice President  - Technical Research at Prabhudas Lilladher Pvt. Ltd, said.

“Currently, the stock has moved past the significant 200DMA level of 191 to improve the bias and has indicated strength for further upside movement in the coming days as is justified by the RSI indicator which has shown a trend reversal from near the highly oversold zone and signaling a buy,” he said.

Parekh further added that it has got immense upside potential and with the chart looking attractive, buying and accumulation is recommended in this midcap stock for an upside target of 240-255 keeping the stop loss of 180 for a time frame of 2-3 months and expect for decent returns.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)