Stock: Piramal Pharma Buy: 229
Stoploss: 205 Target: 310 (Duration 6-7 months)

The Rounding Bottom Pattern is a long-term reversal pattern that is best suited for weekly charts. The rounding bottom represents a long consolidation period that turns from a bearish bias to a bullish bias. The Rounding Bottom Pattern is used in technical analysis to signal the potential end of a downtrend. The pattern is considered complete once the price breaks out of neckline. The neckline is the two highest points of stock during the trading period. The strongest confirmation of the pattern comes from the volume indicator. A valid rounding bottom starts with higher volumes during the decline, flat volumes during the range, and increasing volumes at the reversal.
All the above criteria are successfully check listed by the Piramal Pharma stock on the weekly time frame. We have seen the breakout with volume from the neckline around 180 levels. After breakout from the rounding bottom pattern, we have also seen another pattern formation which is flag pattern. Its main function is to signal the continuation of the trend after a pause. It gives a window to the traders to take entry who missed it in the previous move. Flag patterns are most often seen when there is a steep and large initial move in one direction followed by sideways consolidation. The tight consolidation that came after the big breakout candle shows that bulls are not waiting for better prices and are buying every chance they get. The technical target of the Piramal Pharma would be the height of the rounding bottom pattern and added from the breakout point. So the technical target would be 310. For stoploss, we can consider the lower trendline of Flag Pattern which comes around 205.

Read more: Flag pattern seen in this multibagger pharma stock; time to buy?

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