AstraZeneca Pharma India forms sizeable bearish candle

The stock of AstraZeneca Pharma India Limited (AZPIL) has gained more than 120 per cent from its 52-week low and given nearly 62 per cent returns from year-to-date. However, on Tuesday, the stock has formed a sizeable bullish candle on the daily timeframe along with a strong volume, which suggests a pause in the uptrend.

Among the momentum indicators, the 14-period daily RSI has cooled off after touching the extreme overbought zone and at present, its reading is 71.36. The RSI is trading below its 9-day average and it is in a falling mode, which indicates a further downside momentum. The stochastic oscillator has also given a bearish crossover.

Moreover, there has been a negative divergence between the daily RSI, daily stochastic, and the stock price movement, which is suggesting a limited upside. A negative divergence occurs when the price is making a higher high, while the indicator forms a lower high.

Going ahead, if the stock sustains below Tuesday’s session low of Rs 4,120.85 and trades convincingly below this level, then there is a high probability that Tuesday’s high point of Rs 4,970 may become a temporary top for the stock.

On Tuesday, AstraZeneca Pharma India stock closed at Rs 4,231.05 per share, dipped by 7.07 per cent. The stock opened at Rs 4,694.90 per share and hit an intraday high of Rs 4,970 and a low of Rs 4,120.85 per share on NSE.