Glenmark Pharma may test Rs 900-920: Amit Gupta

Amit Gupta of ICICIdirect told CNBC-TV18, "The pharmaceutical stocks are performing well. If you look at the last one week's movement – these stocks had not given up before also though we had seen some kind of profit booking in the other defensives like technology space. But in pharma they went sideways and now they have started moving up. Especially Glenmark Pharma has gone through four or five months of consolidation in 2014, the second half of 2014 and now the stock has moved above Rs 820-830 levels again. Last time it had made a top around Rs 825-830 and then it had come down to about Rs 700-740 levels and that time the qualified institutional placement (QIP) news was coming in the market that the company is going to come out with a QIP."

"Historically we have seen that whenever any company comes out with a particular corporate action then generally the stock falls in fear of the equity dilution but after that news the stock has already come down, we have seen the short formation, people are still present because we have not yet seen that kind of open interest closer in the stock. The short covering participation is due now in the market in this stock, so over the period, Rs 900-920 levels can also be seen in this and on decline towards Rs 820-830, the previous breakout, one should remain buyer on decline at this level in the stock," he said.

"However, if you look at the overall structure then 2008 high was Rs 740 in Glenmark and in 2014 it has already consolidated around Rs 740, so it has already formed a base now and the bottom is formed around Rs 740 for the stock. Now the trading bet remains positive, structurally in it and Rs 900-920 levels are the short-term targets. The stock can go at much higher levels in the coming months."