Divis Labs may test Rs 1230, says Hemant Thukral

Hemant Thukral of Aditya Birla Money told CNBC-TV18, "We have seen aggressive short covering coming in all the counters like banks including State Bank of India (SBI), HDFC Bank and HDFC. In fact for that matter Reliance Industries, Oil and Natural Gas Corporation (ONGC) were all short covering. I think people were caught by surprise by no Reserve Bank of India (RBI) hike, but on the other side, stocks in pharma side have seen fresh longs being built up."

"Something like Lupin, Ranbaxy Laboratories and Cipla have seen good delivery based volumes also. So keeping this thing in mind I do see some short covering continue, because still some shorts are open, specially on the banking front. But if someone wants to bet with the people who have taken long positions then I will totally focus on names like Lupin and something like Ranbaxy or Cipla. So pharma would be at the top of the radar right now," he said.

"Midcap pharma has done extraordinarily good in last two sessions, but Divis Laboratories has open interest to the tune of 7 percent yesterday. Not only that, the delivery marking has been very good, because this is not a stock where such a high delivery is being marked."

He further said, "Technically Divis Labs has managed to close above Rs 1,160 which was acting as a resistance point for a very long time on weekly charts, so I think there is a clear breakout. The stock should retest its 52-week high of Rs 1,230-1,235, so anybody who is going long today can keep a stoploss of Rs 1 ,165 and a target of Rs 1,230. I think pharma will also will continue to outperform in this market."