Aurobindo Pharma – Short Term Buy Recommendation
We recommend a buy in the stock of Aurobindo Pharma from a short-term perspective. It is evident from the charts of the stock that in late February this year, the stock found support at its long-term base zone between Rs 160 and 165.
The stock’s medium-term downtrend from January peak of Rs 275 appears to have arrested at the support zone. It consistently provided support for the stock in late May, June and also in July. However, the stock subsequently changed its trend, taking support from this zone and triggered by positive divergence in daily moving average convergence divergence indicator.
On Monday, the stock jumped four per cent, emphatically penetrating its 21- and 50-day moving averages. This bullish momentum continued and the stock breached its immediate resistance at around Rs 181 on Tuesday. We notice that there has been an increase in volumes in the past two trading sessions.
The daily relative strength index is featuring in the bullish zone and weekly RSI is inching upwards in the neutral region. Daily MACD has signalled a buy and is on the brink of entering into the positive territory from the negative territory.
We are bullish on the stock from a short-term horizon. We expect the stock’s up-move to continue and touch our price target of Rs 192 or Rs 197 in the ensuing trading sessions. Traders can consider buying the stock with stop-loss at Rs 180.
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