“Auropharma” Facing Stiff Resistance

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Targets : 549-535 Sell range : 635-625 Stoploss : 651 Duration : 3-4 weeks

Outlook :
Daily chart of this Pharma stock (Aurobindo Pharma Ltd) is showing a sharp down trended move over the last couple of weeks.
The stock price has witnessed a downside breakout of the triangle like pattern on 21st Apr 2017(red converging lines) and slided further till the lower levels of Rs .582 levels
The attempt to show upside bounce (pullback) was lacking its strength and the stock price now generating strength on the decline.
Daily negative swing indicator like –DMI is widening up and weekly ADX is turning up. This is signaling that the downside momentum is picking up.
We observe a strong overhead resistance of monthly pivots (black line) around Rs .632 levels and also a support trendline turned into new upper resistance trendline around Rs 642 levels recently. This area was offering a stiff support for the stock price over the last six months. In past, the stock prices have managed to bounce back sharply for few occasions from near this support. Hence this is negative for the stock price ahead.
Daily 14 period RSI has now turned down from near 50 levels, which is signaling a weak strength in the recent upside bounce back of the stock.
The overall negative chart and momentum pattern is showing a sell trade setup for near term. One may look to go for a short trade as per levels mentioned above.
Trade closed: target reached
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