Sun Pharma vs Cipla vs Auro Pharma: How should you trade these healthcare stocks

Dalal Street kicked off the week on a positive note and settled higher on Monday. However, the gains were capped due to selling pressure in the last hour of the trade. BSE's Sensex rose 126.76 points, or 0.22 per cent, to 57,653.86, whereas Nifty50 added 40.65 points, or 0.24 per cent, to 16,985.70 for the day.

During the previous trading session, pharma stocks emerged as the top performer on a sectoral front. Pharma stocks including Sun Pharmaceutical, Cipla and Aurobindo Pharma were on traders' radar amid the volatility at Dalal street. Here is what Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher has to say on these stocks ahead of Tuesday's trading session:

Sun Pharmaceuticals | Buy | Target Price: Rs 1,070 | Stop Loss: Rs 940
Sun Pharma has made a decent correction from the 'double top'  level of Rs 1080 to Rs 940 and has been consolidating around these levels for quite some time. It has also maintained above the 200 DMA level, and a decisive close above the 50 DMA would improve the bias and anticipate further upward movement. With rising volume participation and RSI recovering from the oversold zone, it is on the rise. We recommend a buy in this stock for an upside target of Rs 1,070, keeping a stop loss of Rs 940.

Cipla | Buy | Target Price: Rs 940 | Stop Loss: Rs 860
Cipla's shares have corrected much and now the stock has been taking support near 0.38 per cent retracement level, which is at around Rs 860 level. We anticipate the stock to recover from here on and make a bounce back to some extent. The RSI also is at the oversold zone and some recovery is anticipated. We recommend a buy in this stock for an upside target of Rs 940 keeping a stop loss at Rs 860.
 
Aurobindo Pharma | Buy | Target Price: Rs 570 | Stop Loss: Rs 480
Auro Pharma is gradually making a higher bottom formation pattern and is now sustaining above the 200 DMA level. With the RSI indicator in rising mode the stock is poised for an up move to scale new higher targets. It has been also maintaining  above  200 DMA & 50 DMA moving averages and thus we recommend a buy in this stock for an upside target of Rs 570 keeping a stop loss of Rs 480.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)

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