Tech Query: Where can Aurobindo Pharma find a bottom?

I have shares of Aurobindo Pharma. What is the medium-term and long-term outlook for this stock?

Pradeep Kabra

Aurobindo Pharma (₹524.10): The stock has been in a strong downtrend since June 2021. There is no sign of a reversal and also a bottom formation. So, the overall downtrend is still intact. There is room for the stock of Aurobindo Pharma to fall further from current levels. The next important and strong support is available only at ₹385 — the 200-Month Moving Average (MA). The current downtrend in Aurobindo Pharma can extend up to ₹385. However, in March 2020, this 200-Month MA has provided strong support and the stock has risen well from there. So, there are good chances that the stock can find a bottom around ₹385 in the next few months.

Since you have not mentioned your purchase price, it is very difficult to give some advice. However, if you are in a loss then it is better that you exit this stock at current levels. Maybe you can consider buying the stock again at ₹390. From a long-term perspective, a strong bounce and a possible trend reversal from the 200-Month MA will have potential to take Aurobindo Pharma higher to ₹800-900 levels again in the next few years.

I have purchased Can Fin Homes at an average price of ₹525. What is the long-term outlook? Should I exit the stock with a loss or accumulate at current levels? I am a long-term investor.

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Prashant Pore

Can Fin Homes (₹519.85): Since you are a long-term investor, you can continue to hold the stock. From a long-term perspective, Can Fin Homes has potential to target ₹730 and ₹780 in the coming months. But it is not clear whether the rally to the above-mentioned levels will happen from here itself or after seeing some more fall. Immediate support is at ₹460. Below that ₹430 and ₹400 are strong supports.

A much lower support is at ₹360. Even if a fall is seen from here, the downside is likely to be limited to ₹400. You can consider accumulating the stock at ₹470 and ₹440. Keep the stop-loss at ₹340. Trail the stop-loss up to ₹565 as soon as the stock moves up to ₹640. Move the stop-loss further up to ₹660 when the stock touches ₹710 on the upside. Exit the stock at ₹770.

I hold shares of Polyplex Corporation at an average price of ₹2,150. The share price has been going down steadily. Please advise whether I can continue to hold the stock or exit it.

Ramakanth Bhat, Kochi

Polyplex Corporation (₹1,712.05): The stock has been beaten down consistently over the last four weeks. There is no sign of a reversal as of now. Next supports are at ₹1,620 and ₹1,560. It will have to be seen if the stock manages to bounce from either of these two supports. If the stock continues to fall below ₹1,560, then it can tumble towards ₹1,250. If a strong bounce is seen either from ₹1,620 or ₹1,560, a relief rally to ₹2,000-2,100 is a possibility. But that will still be a corrective rally and not a trend reversal.

To indicate a strong trend reversal, Polyplex Corporation has to rise past ₹2,100 decisively. That may not happen immediately. You can consider two options. First is to exit the stock with a loss at current levels. Second option will be that if you have some more allocation left uninvested, then you can accumulate at ₹1,630. Keep the stop-loss at ₹1,590. Exit the stock when it goes up to ₹2,000. Ideally, our suggestion for you will be to exit the stock at current levels with a loss. You can consider reinvesting that money in some other good stock that will have potential to rally in the coming months.

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