GLENMARK features as Bollinger Band Squeeze pick

Glenmark Pharmaceuticals Limited has been picked up by our Bollinger Band Squeeze scanner, which suggests that the stock is near a consolidation breakout. The Bollinger Band Squeeze occurs when the volatility falls to low levels and Bollinger Bands narrow. A volatility contraction or narrowing of the bands can foreshadow a significant advance or decline.

The stock had given a neckline breakout of Adam and Adam double bottom pattern as of November 18, 2019, and marked the high of Rs 374. Considering the weekly time frame, the stock is trading in a contracting consolidation for the last seven weeks. However, as of now, the price action has narrowed substantially and the stock is likely to give a consolidation breakout in the coming days.

Currently, the stock is trading above its 20-day EMA (344.50) and 50-day EMA (340.90), indicating a short-term uptrend. The daily strength indicator RSI continues to remain flat above its reference line since last seven trading sessions, indicating the absence of strength. However, the stochastic oscillator has already given a positive crossover, suggesting an upside momentum.

Talking purely about the trading levels, the zone of Rs 325-Rs 322 level is a crucial support area and the level of Rs 357-Rs 360 is the resistance zone. A sustainable move on either side would lead to a trending move.