Aurobindo Pharma shares defend key moving averages; short-term upside likely: Systematix

Systematix Shares and Stocks (India) on Tuesday suggested accumulating shares of Aurobindo Pharma Ltd for short-term targets of Rs 1,322 and Rs 1,380, respectively. It advised traders to buy Aurobindo Pharma shares in the range of Rs 1,247-Rs 1,243 with a stop loss placed at Rs 1,178 a piece.

The brokerage said Aurobindo Pharma has repeatedly defended its key moving average supports, as it refused to
trade below the 50-day and 20-day Simple Moving Averages (SMAs) placed around Rs 1,185 and Rs 1,183, respectively, and subsequently bounced from these levels.

The domestic brokerage noted that the 20-week SMA, currently positioned near Rs 1,192, has been acting as a dynamic support over the past few weeks, adding that the overall moving average alignment indicates that the short- to long-term trend structure remains firmly bullish.

On Tuesday, the scrip was quoting at Rs 1,282.45, up 2.84 per cent.

From a broader perspective, the weekly line chart suggested that the stock is trading above the neckline of a well-defined Inverse Head and Shoulders pattern placed near Rs 1,228 level. Sustaining above this neckline
confirms the bullish reversal structure, Systematix said.

It said Aurobindo Pharma Ltd exhibited a strong bullish technical setup supported by multiple breakout signals and improving momentum across timeframes. On the daily line chart, the stock has delivered a bullish breakout from multiple consolidation patterns, indicating the resumption of upward momentum after a phase of consolidation, Systematix said. The stock also formed a bullish candlestick pattern, accompanied by above-average volumes, which reflected strong buying interest and confirms the credibility of the breakout.

"Therefore, one can consider accumulating Aurobindo Pharma Ltd in the range of Rs 1,247–Rs 1,243, with a stop loss at Rs 1,178, for potential upside targets of Rs 1,322 and Rs 1,380 in the near term," it said.