Why do I see a potential opportunity in Glenmark Pharma?
The Background
The chart below tells the horror story. Glenmark Pharma was a complete Avoid stock till October of this year. As you can see below, the stock saw a deep decline from the levels of 700 in Jan 2019 to 270 by October 2019
Source: Chartalert.com
The stock all this while was in a free fall with a moving average resistance insight. But then around the middle of Nov, the stock found a floor for itself at 270 and bounced due to the following news: Good Earnings Report + Brokerage Upgrade
Glenmark Pharma jumps 8% on CLSA upgrade #ETMarkets #MarketsNews #BizNews #MarketsUpdate https://t.co/KToRG7sVLe
— ETMarkets (@ETMarkets) November 18, 2019
The Price Action has now made a dramatic shift TURNAROUND with the earlier resistance (1-2-3) now looking like a support.
Source: Chartalert.com
The stock has made a big move from floor of 270 to 370 and in the process – it crossed over the (1-2-3) resistance. Also, in this move, it stalled at a 100-week moving (the new resistance @ 5). The stock since then has cooled off and on pullback offers a great opportunity. The stock can become a great buy around 320-330 range (moving average support) with a potential upside target of 460 (might coincide with 200 week ma and horizontal line). It’s a trade with an upside of 40%+. Now every trade comes with an assumption. It means this trade is valid as long as the stock holds levels of 299.
Once things turnaround, you will see lots of +ve news flow. Having said that, the market will continue to throw opportunities and one should be patient to let the prices come to them. Never make a mistake of buying a stock at higher levels and then regretting later if things don’t work out
Glenmark Pharma gets final @US_FDA nod for Metformin Hydrochloride tablets, a generic version of Glumetza pic.twitter.com/xVlBZ3UaLQ
— CNBC-TV18 (@CNBCTV18Live) November 26, 2019
There is a Bullish theme at play here too. Lots of Pharma names are breaking out. IPCA Labs and Divis Lab continue to be leader. Recently, Granules have exhibited momentum and Suven is on verge of big bang breakout. Glenmark story fits in with the big picture
Please do your own due diligence before investment/trading. The post shared here is only for educational purpose
Glenmark breaks down – Trade has gone wrong. No point fighting – sell off and move on
