Aurobindo Pharma- Real breakout or false?

2021년 7월 11일

The price of Aurobindo Pharma broke resistance at about Rs. 956. As has been a very real possibility with many stocks, this could be a false breakout when we compare the trend with its peers Sun Pharma and Dr. Reddys who too witnessed an uptrend in the months of April owing to the second wave of Coronavirus pandemic. The stock prices could very well fall down below resistance when the pharma sector does not witness such exponential growth, hence this breakout could be short lived. There is currently a sideways trend at Aurobindo near about the resistance levels.
However, We can see a long wick/shadow of the candle at the resistance levels indicating that while prices fell during the day, the bulls managed to push it back up, indicating high demand. Continuing the technical analysis, the current prices are below MA 50, which is usually taken as an indicator to buy. Moving to fundamental analysis, the company is delivering consistent profits and sales volumes and its PE ratios are quite lower compared to its competitors (while it had rise in earnings). Promoter holdings and DII FII have been consistent year on year with no news of any withdrawals. These signal a good fundamental growth in the company. In my opinion, this can be a good buy for a short term period. What are your thoughts? Is the breakout here to stay?