A stock market notice showed Lady Janice Gammell purchased 59,800 shares on Wednesday at a price of around £1.67 each.
That took Sir Bill's beneficial interest in the ordinary shares of the Edinburgh based oil and gas explorer from 596,331 to 656,131.
Investec and Goldman Sachs put out notes on Cairn pointing out a more upbeat outlook for investors.
Goldman cut its target price on the stock from 285p to 250p but upgraded it from neutral to buy. Investec raised Cairn from hold to buy but cut the target from 310p to 220p.
The shares closed the day 3.71% ahead by rising 6.2p to 173.3p.
Sir Bill has announced he is retiring from the company after its annual general meeting in May.
Shares in Cairn have tumbled in value this year having been around 270p in mid-January. That was before the company announced it was the subject of a tax probe by the Indian authorities.
That relates to Cairn's tax bill for 2007 when it completed a £980m initial public offering of its former subsidiary in India.
As a result of the probe Cairn is banned from selling the remaining 10.3% stake it holds in the Cairn India operation, which is now controlled by Vedanta.
Cairn believes it has met all of its liabilities in full.
Earlier in the week a number of other directors also bought shares in Cairn.