Indian market bounced back on August 14, thanks to strong global cues which triggered a short-covering rally. The S&P BSE Sensex is now back above 37,000 while the Nifty50 also reclaimed 11,000 levels.
The S&P BSE Healthcare index was the only index which closed in negative on August 14, down 0.52 percent led by losses in Glenmark Pharma which plunged nearly 8 percent, followed by Thyrocare Tech down 5.07 percent, and Sun Pharma which closed 4.6 percent.
In the last 2 sessions till August 16, Sun Pharma fell more than 5 percent and Glenmark Pharma lost more than 10 percent.
Sun Pharma which reported healthy numbers in June quarter failed to hold onto gains and lost momentum largely due to growing concerns in US and management rejig.
"Sun Pharmaceutical reported good Q1FY20 numbers buoyed by a one-time US supply opportunity and acquisition of Pola Pharma in Japan (USD 25-30 million)," Edelweiss Securities said in a report.
"Going forward, we believe, medium-term earnings growth will be challenging given Ilumya’s slow uptake, non-recurrence of one-off sales and an increase in R&D spend. We maintain ‘Reduce’ with a target of Rs 380 (20x December 2020E EPS)," it said.
In a separate report, Sun Pharma announced major senior management rejig, giving additional responsibilities to Aalok Shanghvi, son of Dilip Shanghvi, the promoter and Managing Director.
Glenmark Pharma Shares touched its 52-week low on August 14 after the company registered a steep fall in its June quarter net profit. Glenmark's Q1 FY20 (April-June) net profit declined 53 percent at Rs 109.3 crore against Rs 233 crore in the same quarter last fiscal.
We have collated a list of stocks which remained in focus on August 14 because of their price action. The technical outlook is limited to 2-3 weeks:
Analyst: Mustafa Nadeem, CEO, Epic Research
ZEE Entertainment: Stocks could rally towards Rs 410
The stock is in corrective mode and may be nearing a medium-term bottom based on its wave pattern and 50 percent retracement of its overall uptrend.
There is also positive divergence on the RSI(14). The stock has been trading in a range of Rs 300-400 while the RSI is pointing to an impending up move that can take the prices to higher levels of Rs 410 in the next 4- 6 weeks. A stop loss should be placed below Rs 307.
Sun Pharma: Sell with a target of Rs 368-344 with a stop above Rs 445
The stock is in a bearish trend and it may continue to remain in the phase since it has been in a downward falling channel making lower highs and lows.
RSI(14) is showing a negative divergence on the daily scale. There is a resistance placed at 200-SMA at Rs 444. We expect lower target of Rs 368/344 with a stop loss above Rs 445 in the next 4-6 weeks.
Glenmark Pharma: Sell with a target of Rs 320-290
A breakdown is seen in stock recently. It breached important support levels and closed below its long term average of 200-DMA on the monthly scale as well.
The stock is in aggressive bearish grip and recent gap down with higher volumes confirms the trend. The downward channel indicates lower price targets of Rs 320-290 with a stop loss above Rs 430 in the next 2 - 3 months.
Motherson Sumi Systems: Maintain buy with a target of Rs 125-130
There is a positive divergence in RSI(14) in Motherson while on monthly time frame there is very good support at levels of 91/92.
The stock is also available at the lower range of its channel and a short term up move can be seen in prices in the next 3-4 weeks for an upside target of Rs 125-130. A stop-loss could be placed below Rs 88.
Dr Reddy’s Laboratories: Next target Rs 2,900 and keep a stop below Rs 2,400
The stock has reversed from its Head and Shoulder neckline making it a false breakdown while a recent bullish crossover is also seen of 50 and 100 MA.
We expect this bullish cross to provide strength and expanding move in prices can be seen with an upside target of Rs 2,900 with a stop loss below Rs 2,400.
Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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