Chart Check: 100% in 6 months! Multi-year trendline breakout puts this smallcap stock on buyers' radar

RPG Life Sciences, part of the pharma space, has more than doubled investors’ wealth in the last 6 months pushing the stocks to a fresh record high in November, but the rally may not be over yet, suggest experts.

After the steep rally, the stock is trading near overbought levels which could lead to some profit taking but traders can look to buy the stock on dips for a possible target of Rs 1,300, they say.

RPG Life, part of the S&P BSE Smallcap index, hit a record high of Rs 1,012 on November 15, 2022. It has rallied nearly 15% in a week, and over 25% in a month. On a 3-month basis, the stock rose nearly 50%, Trendlyne data showed.

The stock recently witnessed a breakout from a multi-month trendline connecting the highs from January 2018 to October 2022 on the monthly charts which augers well for the bulls.

The Relative Strength Index (RSI) is at 71.1. RSI above 70 is considered overbought. This implies that the stock may show a pullback. MACD is above its center and signal line, this is a bullish indicator.

The stock has been making higher highs and higher lows on the monthly charts since May 2022. In terms of price action, it is trading above most of the crucial short- and long-term moving averages which is a positive sign for the bulls.


RPG stock price started its up move from Rs 45 recorded in February 2014. The stock made a high of Rs 607 in January 2018 and continuously took the support of averages in its uptrend.

“During Covid, the stock corrected & made a low of Rs 146 (March 2020) trading below averages. Thereafter, value buying followed and the stock made a high of Rs 752 (September 2021),” Bharat Gala, President - Technical Research, Ventura Securities, said

“Recently, the stock gave a pattern breakout and made a high of Rs 995 above previous all-time highs, accompanied by volumes. A breakout above Trendline connecting January 2018 and October 22 has occurred,” he said.

“A positive weekly candle formation above averages is observed in the stock, which suggests buying interest. The MACD, KST & ADX indicator suggests a possible firm uptrend” highlighted Gala.

“The possible targets are Rs 1,300-1,500. If the stock price corrects downwards the buy levels are (Rs 928-886)-Rs 853-(Rs 820-800). Stop loss to be observed in the trade is Rs 725,” he recommends.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)