Pfizer - BUY

We recommend a buy in Pfizer from a short-term perspective. It is clearly evident from the charts of Pfizer that it was on a long-term downtrend from its 52-week high of Rs 850 (recorded on December 31, 2007) to late September low of Rs 513. However, the stock found support around Rs 525 and it reversed direction. This stock’s reversal has been supported by a positive divergence in the daily relative strength index. The stock gained six per cent accompanied by high v olume on September 30, forming a bullish engulfing candlestick pattern.

Subsequently, on October 1, the stock breached the long-term down trendline as well as its 50-day moving average, with above average volume. The daily relative strength index is on the brink of entering in to the bullish zone from the neutral region.

The moving average convergence and divergence is signalling a buy. We are bullish on the counter from a short-term perspective. We expect the stock to move up until it hits our price target of Rs 637 in the approaching trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 548.