Lincoln Pharmaceuticals bounces from trendline support

The stock of Lincoln Pharmaceuticals Limited has witnessed an almost 233 per cent upside from the low of Rs 85.05, which was registered in the month of March 2020. However, on September 21, 2020, the stock had formed a bearish shooting star candlestick pattern and thereafter, witnessed a correction. The correction is halted near the 38.2 per cent Fibonacci retracement level of its prior upward move (Rs 85.05-Rs 283.45).   

Considering the daily chart, the stock is trading in a rising channel since October 2020. Recently, the stock has bounced from the edge of the lower trendline support of the rising channel. At the same time, it coincides with the 200-day EMA level.   

The reversal from the support zone is further justified by the momentum indicators. The leading indicator i.e. the 14-period daily RSI is currently quoting at 56.60 and it has given a positive crossover. The fast stochastic is also trading above its slow stochastic line, which is a bullish sign. Moreover, the stock has also surged above its 20-day EMA, 50-day EMA, and 100-day EMA levels, which is a bullish sign.   

Going ahead, the zone of Rs 222-Rs 219 is likely to act as crucial support for the stock as it is the confluence of demand line of the rising channel and 200-day EMA level. While on the upside, the level of Rs 244 is likely to act as immediate resistance for the stock.   

On Thursday, the stock of Lincoln Pharmaceuticals surged 5.27 per cent and closed at Rs 236.70 per share. The stock opened at Rs 226.60 per share and hit an intraday high and an intraday low of Rs 238.60 and Rs 225.55 per share, respectively on NSE.  

Disclaimer:   

This article is just for understanding purposes and should not be considered as a recommendation. Readers are advised to do their own research before making any investment decision. Further, DSIJ and its authors are not responsible for any kind of losses incurred.