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Last Updated : Aug 09, 2018 10:20 AM IST | Source: Moneycontrol.com

Buy Sanofi India with target Rs 6,995: Dharmesh Shah

Recently, the stock has registered a breakout from the upper band of aforementioned channel backed by rising volumes, indicating an acceleration of upward momentum.

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Dharmesh Shah

ICICI Direct.com Research

Sanofi India (SIL) is a leading MNC in the domestic pharmaceutical market. SIL has two manufacturing sites (Ankaleshwar, Goa) and also exports to 48 countries.

The share price saw a major turnaround in March 2018 as it logged a resolute breakout from multi-year consolidation (Rs 3730–4940) during 2015-18.

Prices have been inching northward post retesting aforementioned breakout level (Rs 4720), suggesting renewed buying demand at elevated levels. The recent price activity signals an acceleration of upward momentum, providing a good entry opportunity to ride the next leg of the up move.

The stock has been forming higher peak and trough since September 2017. This overall price action has been captured in an upward sloping channel formation (drawn adjoining September 2017 to May 2018 lows of Rs 3940-Rs 4720 and projected from January highs of Rs 5151).

Recently, the stock has registered a breakout from the upper band of aforementioned channel backed by rising volumes, indicating an acceleration of upward momentum.

The key support base for the stock is around Rs 5690 region as it is the 38.2% retracement of the recent up move (Rs 4720 to 6298).

Based on the aforementioned technical evidence, we expect the stock to resolve higher from here on and head towards Rs 6995 over the medium term being the measuring implication of the aforementioned rising channel (Rs 6050-5100=950 points) added to the higher band of the channel Rs 7000 (6050+950=7000) corroborating with 161.8% extension of up move (Rs 3086 to 4950) projected from Rs 3940, placed around Rs 6955.

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.
First Published on Aug 9, 2018 10:20 am
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