Aurobindo Pharma (Rs 194): In our previous review of Aurobindo Pharma we had pointed out that the stock was attempting to reverse from the long-term support zone between Rs 100 and Rs 140, within which it moved in the period between November 2001 and May 2003. A double bottom was formed in the daily charts around Rs 100 in November and December 2008 and the stock has almost doubled from these levels.
It will however face resistance at Rs 200 and Rs 260 over the next three months and a reversal from either of these levels will result in a sideways move between Rs 100 and Rs 250 for the rest of the year.
Investors with a long-term perspective can hold as long as the stock holds above Rs 100. Though there will be stiff resistance around Rs 260, a rally towards Rs 380 is possible over the next two years.