The stock can be bought at the current level and on dips to Rs 760 with a stop loss below Rs 735 for the target of Rs 860-890, says Ashish Chaturmohta of Sanctum Wealth Management.
Aurobindo Pharma has formed major double bottom formation between Rs 800 and Rs 500 on the weekly chart. After hitting high of Rs 827 on high volumes indicating buying participation in the stock; price corrected down to Rs 720 on below-average volumes indicating long positions holding in the stock.
It has seen bounceback from 38.2 percent Fibonacci retracement level of the major rise from Rs 527 to Rs 827. The rally has been on strong momentum indicated by long bullish candlestick and above average volumes.
RSI and Stochastic have given positive crossover with their respective averages on the daily chart. Thus, the stock can be bought at the current level and on dips to Rs 760 with a stop loss below Rs 735 for the target of Rs 860-890.
The author is Head of Technical & Derivatives at Sanctum Wealth ManagementDisclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.