The prices were telling us that something was cooking as the medium / long term trend had changed upwards. This has proved true - A Japanese company has announced buying the promoters' stake at Rs 737/- !!
As I always say "Prices tell us more about the future than balance sheets!!"
Well this has prompted me to look in to the price behaviour of other Pharma companies.
BIOCON looks good on the charts.
You would observe that the scrip is consolidating a lot with major support being at Rs 440/-. I expect a break out above Rs 480 should lead to further buying in the stock. Keep a stop at Rs 440. Medium term investors can wait for Rs 600/-.
Happy trading !
CA Rajiv D Khatlawala
2 comments:
Hello Rajiv
Thanks for maintaining such an informative blog. I have benefited a lot from your commentary, in particular your SBI call saved me a lot of money as I exited almost completely from the stock at 2000 levels.
I already have a few shares of ranbaxy and yesterday I added about Rs 30,000 more to my Ranbaxy position. I am a little puzzled as to why the price is stuck at 560 when the Japanese company is planning to make an open offer at 737.. Is there a catch in there I cant see ?
Dear Sudeep,
It is the old market trick " Buy on rumours , Sell on Fact"
Usually prices will tend to retrace when an anticipated news actually comes out. This is because those who have bought in anticipation would tend to book profit.
Moreover the open offer will take a few months to materialise - but since you are an investor, nothing to worry about
CA Rajiv
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