Apollo Hospitals at pattern breakout level, withstands pessimistic market conditions

Indian stock markets have been trending southwards since the end of January on the back of profit booking by investors. Yet, the stock of Apollo Hospitals Enterprise has dully withstood the pessimistic market conditions and is striving to maintain consolidation to upside.

The company also digested its marginal decline in Q3FY18 net profit on both QoQ and YoY basis. Recently, the company issued letters of comfort to the banks, giving assurance about its debt. The letter has been issued to both Yes Bank and HDFC Bank so that two of its major subsidiaries can avail debt.

Technically, this BSE 100 stock had hit its all-time high at 1544 on March 2, 2016. Since then the stock has been making lower tops lower bottoms, till it hit 959 on November 17, 2017. The stock had formed a Hammer pattern and gave straight 5 weeks of an upsurge. The stock corrected up to 50 per cent retracement of the said upsurge and has seen a bounce back in the recent weekly candle.

Meanwhile, considering the daily time frame, the stock has formed an Inverse Head and Shoulders pattern and is trailing in the neckline breakout zone from last 4-5 sessions. Volumes are low but are seen picking up. Even 14-period RSI is at the trendline breakout level of 57.

Considering all this, the stock could be a good bet in the medium term if its sustains 1200-1220 levels on closing basis. Thereby, the stock holds potential upside of 240-300 points going forward.