technical view on Sun Pharma on account of Sun Pharma @ 52-wk high by Shubham Agarwal,Associate Vice President,Technical Equities Motilal Oswal Securities Ltd.
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Sun Pharma – CNX Pharma as a sector has been outperforming the Nifty for past many months. On a sector rotation chart, the sector is still placed as a leader and there is no sign of exhaustion yet. The outperformance can be expected to continue which can yield another 10-15% on the upside.
Sun Pharma has the highest weightage in CNX Pharma of 21.6% and is one of the best performer within the Pharma pack. It has been reporting higher tops and higher bottoms for more than one and a half year.
The technical setup is strong with a trend line curve acting as support. Last reported low for the scrip is at 640 which coincide with the trend line support of 625 with a marginal deviation. This indicates important support around the band of 625-640 and upside is open for 760. It has been reporting all time highs but the action has been mean reverting with an upward bias.
Pullback on the scrip in the band of 660-670 can be used as a buying opportunity with a favorable risk / reward of higher than 1:2. However, for investors who already hold the same can continue with their allocation for a target of Rs. 760.
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