September 08 2019

“Buy Low Sell High” is such an attractive value proposition that we sometimes forget that nothing in the market is straightforward. The stock trades at lows or highs for a reason.

Here’s the Cipla Stock weekly Chart

Source: Chartalert.com

Historically, Cipla stock has always bounced from the current levels of 460 during the last 5 years, and so one can argue why not again. But here’s what happened around end August – Credit Suisse came out with bearish commentary on the stock – slashed EPS estimates for FY20 and FY21 and lowered stock price target to 445, which is lower than the stock current market price of 475.

Now, you have to ask why will anyone buy this stock even if it is trading at multiyear low when the outlook is so bad. One would be much better off – Avoiding the stock

Please do your own due diligence before trading. The article has been shared for educational/informational purpose only.