Gland Pharma extends its rally above both averages

added another 2.1 percent today, closing at Rs 2,961.9. This keeps the stock comfortably above its 20 day average of 2,901.14 and its 50 day average of 2,922.78. The stock opened at 2,907.2, made a high of 2,978, and closed at 2,961.9. Both moving averages are now well below the closing price, with the 20 day average sitting under the 50 day average, which is the setup that usually accompanies a stock in an active uptrend rather than one recovering from a dip. What stands out on this chart is the scale of the move behind today's gain. Gland Pharma spent most of last year and the first quarter of this one stuck between 1,650 and 2,000, going nowhere for months. Since May, the stock has more than doubled off that base, and today's close near 2,960 puts it not far from its all time high territory. Here is where I get cautious rather than excited. A stock that has run this far, this fast, tends to see sharper pullbacks than one climbing gradually, simply because there are more people sitting on large gains looking to book profit. The 20 day average at 2,901 becomes the first real test on any pullback, since price has respected it closely through August and September. I would watch two things from here. Continued closes above 2,960 with the 20 day average holding as support would mean the uptrend still has room. A break below 2,901, especially if it happens quickly, would be the first sign that this rally needs to cool off before it can continue. I do not hold a position in Gland Pharma Limited