Sun Pharma sees Golden Cross; other pharma stocks with similar pattern

Technically, the term 'Golden Cross' has bullish implications with short-term support seen moving higher. Apart from Sun Pharma, Aurobindo Pharma and Divi's Labs too witnessed this formation recently.

Sun Pharma stock is witnessing the formation of 'Golden Cross' on the daily chart for the first-time in over 7 months.  Technically, the term 'Golden Cross' means that the 50-day moving average (50-DMA) of the particular stock is now rising over the 200-DMA. In general, 'Golden Cross' is considered a bullish (positive) development, as it indicates that the short-term support for the stock is moving higher. The 50-DMA of Sun Pharma is at ₹1,683, while the 200-DMA at ₹1,681.  Earlier this year on March 11, Sun Pharma had witnessed the formation of 'Death Cross' - which is the opposite of 'Golden Cross', as the 50-DMA dips below the 200-DMA. Post the 'Death Cross' formation the stock shed around 6 per cent to a low of ₹1,548 towards the end of September.  Meanwhile, apart from Sun Pharma, Aurobindo Pharma and Divi's Laboratories are the two other pharma stocks to have witnessed the formation of 'Golden Cross' in recent days. 

Technical Outlook on Sun Pharma, Aurobindo Pharma, Divi's Labs:

Sun Pharma

Current Price: ₹1,785  Upside Potential: 9.2%  Support: ₹1,750; ₹1,737; ₹1,718  Resistance: ₹1,850  The daily chart shows that Sun Pharma stock is likely to trade with a positive bias in the near-term as long as the stock quotes above ₹1,718. Interim support for the stock can be anticipated around ₹1,750, and the 20-DMA at ₹1,737. 

 

  On the upside, the stock may attempt to test the higher-end of the Bollinger Bands on the monthly scale at ₹1,950. The stock may face intermediate resistance around ₹1,850 levels. 

Aurobindo Pharma

Current Price: ₹1,204  Upside Potential: 22.1%  Support: ₹1,180; ₹1,157  Resistance: ₹1,230; ₹1,320; ₹1,380  Aurobindo Pharma stock has gained nearly 22 per cent in the last three months. The stock at present is seen trading close to its 20-DMA support at ₹1,180; below which the key short-term support stands at ₹1,157. 

 

  On the upside, the stock seems to be facing some resistance around the super trend line on the weekly scale at ₹1,229 for the last three weeks. As and when the stock overcomes this challenge it can potentially extend the rally towards ₹1,470 levels. Intermediate resistance can be expected around ₹1,320 and ₹1,380. 

Divi's Labs

Current Price: ₹6,472  Upside Potential: 5.1%  Support: ₹6,350; ₹6,215  Resistance: ₹6,570; ₹6,700  Divi's Labs stock seems to have bounced back after testing the 50-DMA support, which also coincides with the 100-DMA around ₹6,350 levels in recent days. That apart, the daily chart shows that the 200-DMA at ₹6,215 is likely to act as a major support for the stock. 

 

  On the upside, the stock faces near resistance around the 20-DMA at ₹6,570 followed by the trend line hurdle around ₹6,700. Chart suggests that the upside for the stock seems to be capped around ₹6,800 for now.