Technical Check: This healthcare stock likely to benefit from Omicron; likely to touch fresh highs in next 6-9 months

Metropolis Healthcare Ltd which rallied more than 60 per cent so far in 2021 compared to 22 per cent upside seen in the Nifty50 in the same period could benefit from the new COVID variant Omicron as RT-PCR test report will increase.

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The company with a market capitalization of more than Rs 16000 cr hit a fresh 52-week high of Rs 3396 on 17 November.

Investors can look at accumulating the stock on dips for a target of Rs 3950 which translates into an upside of nearly 20 per cent from Rs 3292 recorded on 30 November.

Metropolis Healthcare is engaged in the business of providing pathology and related healthcare services. It has a widespread presence across 19 states in India with a leadership positions in west and south India.

“Maharashtra government announced a new order for airline passengers on 30 November. The government has announced a mandatory quarantine for international passengers coming from ‘at risk’ countries and today government has announced measures for domestic travel as well,” Yash Gupta, Equity Research Analyst, Angel One Ltd, said.

“Now domestic passengers travel to Maharashtra compulsory to have a Negative RT-PCR test report and interstate passengers must be fully vaccinated or have a negative RT-PCR report,” added Gupta.

He further added that it is good news for the diagnostic sector, and we continue our buy call on Metropolis Healthcare Ltd with a target price of 3600.

The company offers analytical and support services to clinical research organizations for their clinical research projects.

Technically, the stock is trading above its short-and long-term moving averages of 30,50,100 and 200-Days Moving Average. FIIs increased their shareholding sequentially from 28.59 per cent in the June quarter to 30.72 per cent in the September quarter. It has given a breakout from 6 months consolidation range which auger well for the bulls.

However, MFs decreased their holding from 12.48 per cent in the June quarter to 9.67 per cent in the September quarter.

Pricewise, the stock has been consolidating its gains. For the last 6 months, the price has been sideways between 2600 and 3250 to form a base for the next leg of the rally.

“It witnessed breakout in mid-November to hit high of 3399 and then retraced back into the trading range. In the last 3 sessions price has picked up momentum indicated by bullish candles,” Ashish Chaturmohta, Director, Equity Research at Sanctum Wealth, said.

“Also, volumes are high suggesting buying participation in the stock. On weekly chart the Moving average convergence divergence (MACD) has given positive crossover with its average indicating resumption of the long-term uptrend,” he said.

Chaturmohta further added that the stock can be bought at current levels and on dips to 3230 with a stop loss of 3050 for a target of 3950 in the coming 6-9 months.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)