Marksans Pharma is looking attractive at the current price levels considering the potential it has to go up by 100% in the coming months.
Let’s get into the detailed analysis
The stock has fallen almost 70% during Jan & Feb’2016 due to UK regulator (UK MHRA) warning letter about the company’s Goa plant deficiency in GMP but raised almost 50% from the low level post media reports about UK regulator allows conditional manufacturing at Goa unit
There are couple of interesting things emerged during analysis
Despite the steep fall the stock found it’s support at the “cup pattern” breakout of Aug’2014. The significant factor about this cup pattern was it took years to form the pattern meaning it can be regarded as strong breakout (which can be seen in the graph itself) and it forms a strong support as well.
Irrespective of the warnings from the UK regulator (majority of the revenue of Marksans Pharma comes from UK market), the fundamentals are still intact and the analysts consensus haven’t revised the forecast of company’s future (2017) earnings.
Considering the current market levels and technical/fundamental views; this stock can go upto 92 rupees in 3 months – 1 year time frame; On the flip side, the strong technical support lies at Rs.36 – if this level gives up, it is worth considering exit from the long position.
Answered by me in Quora.