Cipla has been one of the most boring large cap stocks in recent memory.
The most disappointing thing: the boredom started just when everyone expected excitement out of the stock. Cipla broke out above 360 in August 2012. Post breakout, it rallied to 330-340 but that's about it. After that, stock just moved in circles irrespective of market condition. Cipla did nothing even when there was favorable view on Pharma stocks.
Here's the Weekly chart
As you can see in the chart above - post breakout, stock just moved round and round b/w 360 and 430. Now, when stock does nothing for long time, then two things can happen: people give up on the stock or invent reasons to get excited.
One of the reason which keeps coming back and management keeps denying happened again this week: First the news: Promoters of Cipla to sale stake to MNC and then came the denial from the company. It's interesting if you look at the daily chart:
Cipla has created a clear resistance at 425. Now, one of these days/weeks - Cipla will move out of the slumber, and the best indication would be a close above 425. If in next few days, Cipa closes above 425-430 - then expect a start of fresh move in the stock. The big question: When will Cipla move out of long sleep it is in?
The blogpost is purely for educational purpose. Please do not make any trade based on this article. Please do your own due diligence.