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Aurobindo Pharma Technical Analysis #15: Buy | Target Rs 816 | Arijit Banerjee

OUR RECOMMENDATION

CMP#776.95
IdeaBUY
Buy Range755 – 780
Target816 – 826
StopLoss*730
Duration12 – 15 Trading Sessions
Potential Return^5 – 6%
CMP#IdeaBuy RangeTargetStopLoss*DurationPotential Return^
776.95BUY755 – 780816 – 82673012 – 15 Trading Sessions5 – 6%

# CMP on Jan 10, 2019
* Maintain recommended StopLoss by daily closing basis.
   Once 1st target hit, reset StopLoss at 796.
^ The returns are calculated based on CMP#

COMPANY OVERVIEW

Incorporated in 26th December 1986, this generic drug manufacturing company is developing, manufacturing and marketing 7 major product areas encompassing Antibiotics, Anti-Retro Virals, CVS, CNS, Gastroenterological, Anti-Allergics and Anti-Diabetics. The vast majority of the company’s sales are generated in India, followed by the United States and globally in over 150 countries. In Q2FY19, the company has reported Profit After Tax at Rs 611.20 crore vs Rs 779.84 crore YOY. The consolidated revenue rose at Rs 4,751.40 crore as against 4,435.89 crore the year-ago period.

Stock Data
NSE CodeAUROPHARMA
SectorNifty Pharma
52W High830.45
52W Low527
Face Value1
Relative Performance_Aurobindo Pharma vs Nifty Pharma Index

TECHNICAL OBSERVATIONS (WEEKLY)

  • The stock price has been moving in a sideways range in the last four months.
  • In this rangebound move as the price has placed near the lower end of a sideways range, we expect that price will start rising.
  • The stock has formed Bullish Engulfing candlestick near the bottom which is a bullish reversal formation.
Aurobindo Pharma Weekly Chart
Aurobindo Pharma Weekly Chart

TECHNICAL OBSERVATIONS (DAILY)

  • Last two days ago, the stock broke out of the immediate resistance on the back of huge volumes. This healthy breakout confirming the bullishness.
  • Last 3 days, the stock is forming Three White Soldiers which is a bullish continuation pattern.
  • Recent price is closing above the Upper Bollinger Band.
Aurobindo Pharma Daily Chart
Aurobindo Pharma Daily Chart

MONEY MANAGEMENT AND TRADING RULES

1)  It’s advisable not to enter/exit beyond the recommended range.
2)  Strictly follow the StopLoss as mentioned. Honour it.
3)  Use trailing StopLoss to retain profits.
4)  Diversify trading capital into our other technical recommendations.
5)  Risk only the money what you can afford to lose. Hedge accordingly.

ANALYST SUMMARY

This research analysis is prepared by Arijit Banerjee, CMT, CFTe. An engineering graduate developed an early interest in Trading since the age of 20. He is a Chartered Market Technician (CMT) accredited by CMT Association USA, the leading global authority of Technical Analysis and also has been honoured by Certified Financial Technician (CFTe) from the International Federation of Technical Analysts (IFTA), USA. His contribution to the market research was recognized by SEBI, the Regulatory Body of Indian financial market and given him the registration number INH300006582 as a Research Analyst. Over the years, he has gained experience in Technical Analysis with a demonstrated history of working in different asset classes. Himself as a trader, he has trained and continues training novice and experienced traders to become successful, confident and profitable in the financial market.

Disclosure

The views expressed herein are based solely on information available publicly/internal data/other sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. The recommendations provided herein is solely for informational purposes and are not intended to be and must not be taken alone as the basis for an investment/trading decision. Trading and investing are subject to market risk and the securities discussed and opinions expressed herein may not be suitable for all investors. To read the full disclosure, please click here.

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