Ajanta Pharma : Major breakout on chart !!

Ajanta Pharma : Strong upside potential candidate.

The Pharmaceutical theme stocks has been in a great momentum this year and has out performed the bench mark index.

Such outperformance in pharma stocks has seen after long 5 years. The CNX Pharma index was trading in down trend from last 5 years and was trading in Descending channel. However, this year the pharma index has registered strong breakout from the same and i believe the outperformance in Phrama stocks has just started and likely to continue ahead for many months.

 

Now, looking at weekly chart of Ajanta Pharma, the stock has registered a breakout from probable Double Bottom pattern which signals change in medium term trend from bearish to bullish.

The pattern continued for more than 2 years. Going ahead if pattern capitalise well in favor as per expectations, the stock likely to deliver good ROI hereon.

The another chart attached below highlights Price-Volume indicator which shows indicator trading well above 0 zero reading and trending higher which is a bullish signal and compliments bullish view on price. 

From the chart attached below it is evident how beautifully 20 EMA has provided support to the price. Every dip in price has arrested near this average and price resumes its prior upmove forming higher high. Recently stock has reversed finding support near 20 EMA and i believe price likely follow it previous behaviour.

Also, stock is trading well above 50,100 and 200 EMA suggests positive trend and strength in price. Moreover, stock has been forming series of Higher High and Higher Low defines uptrend and compliments bullish view in price.

Following price pattern, volumes, and other technical tools price has the potential to scale higher towards 1720-1840-2000 in the medium-term.

The above view holds true until the price does not close below 1465 levels. The strong support is visible around 1540-1500 levels.

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Disc. The above-shared analysis is solely my view as per my understanding and knowledge and for educational purposes. I will not be responsible for any loss or gain incurred.