Aurobindo Pharma

We recommend a sell in the stock of Aurobindo Pharma from a short-term perspective. It is perceptible from the charts of the stock that it has been on a long-term uptrend from November 2008 low of Rs 101.6. It was on an intermediate-term uptrend from July low of Rs 406 till its October high of Rs 891. However, triggered by the negative divergence displayed in the daily relative strength index (RSI) and moving average convergence and divergence indicator (MACD), the stock’s direction has reversed. On October 29, it tumbled 5 per cent penetrating a key support at Rs 810 as well as intermediate-term up trendline, reinforcing its downtrend. Moreover, the weekly RSI has also displays negative divergence and is declining from the overbought territory. We are bearish on the stock from a short-term perspective. We anticipate it to decline further until it hits our price target of Rs 695 in the approaching sessions. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 815.
via BL