ICICIdirect.com's research report on Cipla and UPL
Pharma index has been one of the strongest performers in the year and has already seen gains of over 29%. Pharma stocks have continued to attract money flows and now flows seem to be entering other stocks that had gone into some consolidation in the last few months. Cipla is one such stock, which is seeing renewed build-up of long positions in last few series.
The 30-60 day historical volatility (HV) spread is likely to move down thus providing upward thrust to the stock. The 60 D HV is already coming down, which is providing comfort on positional basis. In addition the higher cool-off in 30 D HV may lead to immediate up move in the stock.
Recommendation: Buy Cipla in the range of Rs 715-728. Target Rs 870. Stop Loss Rs 653. (Time frame: Three months)
In the T-200 price occurrence chart the out performance of the stock is clearly visible. It is currently trading near record highs and is likely to head higher as the leverage in the stock is still low. This recent break out past 450 is attracting fresh long additions which is likely to take the stock higher.
The 30-60 day historical volatility (HV) spread is reverting from higher levels as the 30 D HV has started to come down. This is likely to keep HV spread up move in check and should push the stock higher.
Recommendation: Buy UPL in the range of Rs 464-472. Target Rs 565. Stop Loss Rs 421. (Time frame: Three months)
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