Technical Bits: Aurobindo Pharma gives downward channel breakout

The stock of Aurobindo Pharma has given downward channel breakout on the weekly time frame along with robust volumes. Additionally, the stock had formed a sizeable bullish candle on the breakout week, which adds strength to the breakout. With this downward channel breakout, the ADX, which shows the strength of the trend, turned upside and moved above the -DI.

The major trend of the stock is positive as it is trading above its weekly pivot and short-long term moving averages and these moving averages are exactly in an ascending order, which suggests that the trend is strong. The leading indicators RSI on the weekly scale currently quoting at 64.65, which depicts positive momentum. The weekly MACD stays bullish as it is trading above zero line from the last two weeks. Moreover, the other volume-based indicators like OBV and Money Flow Index are also very strong.

In the near-term, the zone of Rs. 780-785 is likely to act as major support as it is the confluence of 20-day exponential moving average and upward sloping trendline support. While on the upside any sustainable move above the level of Rs. 840 is likely to open up gates for further rally towards levels of Rs. 895.

On Friday, the stock of Aurobindo Pharma closed at Rs. 830.10 per share, up by 4.34 per cent. The stock opened at Rs. 798.20 per share and hit an intraday high of Rs. 836.95 and a low of Rs. 798.20 per share on BSE.