Nobody Loves IT and Pharma now. But what about long-term Bulls in the sector who don't make up their mind just because the sector is not in fashion.
Lupin as a stock broke out above levels of 500 in early 2012
This is how breakout played out back then
Lupin stock rallied 4 times to levels of Rs. 2000 in following 3 years. This chart is a simple reason why traders follow breakouts. Anyways, But as it always happens...after such a big move - stocks do turn sideways and give time for earnings and fundamentals to catch-up with such a steep move. And if the company behaves well and fundamentals remain intact - then the stock at the base of the consolidation offers fresh opportunity to move higher. Can we say that current decline to 200 week moving average/1400 is one such opportunity
And yes a chart like this is test of faith especially when it's totally out of favor
One Trade with 50% Upside potential in 2017: Lupin near 1400 - can rally back to 2100. If it breaks 1350 - then reevaluate pic.twitter.com/tnv2r82LtE
— Deepak Singh (@smarket) December 20, 2016
Such trades are not easy trades and yes it tests the patience of investors like crazy. How long one can stand against the wind.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers