Today's Pick - Aurobindo Pharma

We recommend a buy in Aurobindo Pharma from a short-term perspective. Form the stock’s life high of Rs 820 (touched in July 2007) Aurobindo Pharma has been on a long-term downtrend as is evident form the charts. However, the stock halted at the long-term support level of Rs 300 a month ago and has been moving sideways above this level since then.

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On February 29, the stock surged higher gaining more than Rs 19 or 6 per cent with more than average volumes . Prolonged positive divergence in the daily momentum indicator had supported the recent up move. The daily momentum indicator is rising in the neutral region towards the bullish zone while the weekly momentum indicator is featuring in the oversold region. The moving average convergence divergence is steadily rising towards the positive territory. The stock is trading well above the 21-day moving average.

Our short-term outlook for the stock is bullish and we expect the stock to make a dash to our target price level of Rs 375 in the forthcoming days. Investors with a short-term perspective can buy the stock while keeping the stop loss at Rs 298.

Via Businessline