Top stock to focus next week: Granules India Limited

The stock is extremely bullish on the daily timeframe and has soared about 5.3% on Friday.

Granules India Limited is a pharmaceutical company that manufactures finished dosages, pharmaceutical formulation intermediates and active pharmaceutical ingredients. It is a midcap company with a market capitalization of about Rs 7650 crore. The stock of Granules is in focus for its recent upmove.

After correcting slightly for a few days, the stock has formed a bullish engulfing pattern on the weekly chart. This is an early sign of reversal. It has closed above its near term resistance zone of Rs 300-303 with heavier volume. Moreover, the stock is extremely bullish on the daily timeframe and has soared about 5.3% on Friday. It has formed a strong bullish candle with a long body and has closed at day’s high. Since its recent swing low of Rs 286. The stock has gained about 11% in just four trading sessions. With such strong price action, the stock has recorded above-average volume, which is found to be greater than 10-day, 30-day, and 50-day average volume, thus indicating larger trading activity.

The stock has closed above its 20-DMA and is bullish for the short term. The 14-period daily RSI has registered a higher high and is placed just below 60, indicating improved strength in the stock. Recently, the MACD line has crossed above the signal line and the histogram turned positive. Moreover, the OBV Is increasing, which indicates bullish sentiment from a volumes point of view. The other momentum oscillators and the technical indicator also point towards the bullish sentiment of the stock.

Overall, the picture is quite bullish. With this, the stock is expected to test the levels of Rs 318 which is a prior swing high, followed by the 200-DMA level of Rs 327. This week, the stock has gained about 7% and has a good potential to continue its momentum for next week. It is an ideal candidate for swing trading and traders can expect decent profits in short term.