The Hindu Business Line : Chart focus

The stock is in a long-term upward trend since April 2003. In Elliott Wave parlance, the stock completed Wave 1 at Rs 164.3 in September 2005. The subsequent correction to the low of Rs .81 can be classified as Wave 2 of the sequence.

The price action since this low is part of the explosive Wave 3. Within Wave 3, Wave 1 was completed at Rs 225 in January 2006 and Wave 2 at Rs 165 in mid-February. The stock appears to be tracing out the third wave of the bigger degree Wave 3. If the price patterns pan out on the lines of this assessment, the stock could move to Rs 375-400.

Fresh exposures may be considered at prevailing levels as well as on declines, with a stop-loss at Rs 270. Investors who have already entered at lower levels may settle for a stop-loss at Rs 250. A close below Rs 250 would only delay the progress towards the target zone and would not negate the positive outlook.

Aurobindo Pharma

This is one of our top portfolio picks from a technical perspective. The stock is in a long-term upward trend and there appears to be significant upside potential from prevailing levels. The near-term outlook is also positive and a move to Rs 720-730 appears likely.

Hold with a stop-loss at Rs 620. Fresh exposures may also be considered with a stop-loss at Rs 620. A close below Rs 620 would delay the rally eventual rally towards the target zone and would not invalidate the long-term positive outlook.

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