First Milestone met… Trajectory still Upwards.

• As we had anticipated, Aurobindo Pharma did manage to pick up buying impetus and post a breakout above an 11-week old Symmetrical Triangle (see chart). Significantly higher cash market volumes back this breakout, which is always an encouraging sign and raises the possibility of further upsides.
• The stock confirms a sequence of higher-high and higher-lows in both daily and weekly time frames -- this implies that the stock has now sealed itself to an uptrend across all time frames.

• At today’s intra-day high of 141, the stock tests our target range of Rs. 136-139 (mentioned in our earlier report) – a return of 18%. Considering that post breakout above 122, the stock has posted 5 successive positive daily closes amidst high momentum; we sense that a short-term ease-off is in the offing.
• A short-term correction towards the breakout zone of (120-122) is likely which should be approached as an opportunity to buy. Intermediate momentum readings are unperturbed which suggests an extension of this recent rally. The next zone of supply for the stock lies at (149-155) which confluences with the panic low of February 2011 and August’ 2011 highs.

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