We should look for a push from 620-625 zone - See market reaction & then participate.
Previous Analysis- Auropharma Falling like EURUSD
It turned from 621 just above 620 support as expected. It is Zero Risk trade for us.
Closed the trade as 620 taken out.
The trading targets are 580 on the downside as provided by traders here but the probable upside is a double over next 2-3 years as per fundamentals. So risk:reward is extremely rewarding for someone with a longer term view. Also, trading does not mean daily/weekly, there might be very long term yearly trends as well to ride.
Now, for that yearly trends around 600 abouts 'could' be reversal. At these prices the stock is priced at 11 times one year forward PE. You can find many junk or high debt commodity stocks trading at 20 times earnings. Some dichotomy here. Extremely poor sentiment towards pharma sector is probably making the pharma companies making bottoms on a longer time frame.
This is my personal view and I have the stock in my portfolio and this is not any advice to buy. Do your due diligence.
Not only auro, look at some front line pharma companies with open mind and risk for some more downside.
Contra view is invited. I will change my view and act on it if a more convincing opinion comes about.
When you have time, can you spend some time on my view:
It looks like banks/financial stocks are in the process of making tops while pharma/IT are doing the opposite. How long it would take is something Im unable to pinpoint. But the triggers would be steep INR depreciation or market understanding that USFDA inspections are not death knell but a required process to make Indian pharma world class in coming times etc.
Sector rotation or we too early to predict that.