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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 following a short-term downtrend from its April peak of Rs 141, the stock took support at Rs 100 in May this year. Subsequently, the stock's significant support at Rs 100 started to provide base and it had rebounded from this level in July-August, this year. The stock has been on a short-term uptrend since early August.
On Monday, it emphatically breached its moving average compression (21-, 50- and 200-day moving averages) at around Rs 109 by jumping more than six per cent with extraordinary volumes. The daily relative strength index is hovering in the bullish zone and weekly RSI is moving higher in the neutral region towards this zone. Further, daily moving average convergence divergence indicator has signalled a buy and has entered the positive territory implying upward momentum. The daily as well as weekly price rate of change indicators are featuring in the positive terrain indicating buying interest. We are bullish on the stock from a short-term perspective. We expect its up move to prolong and reach our price target of Rs 122 or Rs 126 in the upcoming trading sessions. Traders with a short-term perspective can consider buying the stock with stop-loss at Rs 114.5.
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