Buy This Pharma Entity Stock For Over 19% Gains In Up To 3 Months: HDFC Securities

Markets in trade on the previous day extended their rally for the second straight session backed by positive cues, with Nifty notching levels of 17,325. In the overnight trade, Nasdaq gained over 1.8%, while German DAX and French CAC ended on a health note with gains of over 3 percent.

Meanwhile, HDFC Securities has come out 1 Technical Positional pick i.e. given a 'Buy' for up to 3 months.

Below are given the brokerage's stock pick together with the rationale for investment:

Buy Sequent Scientific for a target of Rs. 159 i.e. potential gains of up to 19.32%:

The brokerage bets on the pharma company for a target of Rs. 159 to be realised in 3 months, keeping a stop loss of Rs. 125. At the current price of Rs. 133.25, the stock will offer an upside of over 19% in the short term.

About Sequent Scientific:

Founded in 2002, SeQuent has emerged as an integrated pharmaceutical company with a global footprint, operating in the domains of Animal Health (API and formulation). The company has branded its Animal Health business as Alivira Animal Health. The company's focus is on products for livestock, poultry and companion animals. The company's value proposition includes laboratory and technical support services.

Observation

As per the analyst at the brokerage after showing weakness for a few months, the stock has moved into a consolidation phase in the last few weeks.

As per weekly timeframe chart, there is observed a formation of rounding type bottom at Rs 121-122 levels. Currently, the stock is attempting to break above the rounding bottom at Rs 135-138 levels. There is bullishness in the stock in the near term.

Also there is seen formation of positive divergence pattern in weekly RSI/stock price, which suggest strengthening of upside momentum in the stock price going ahead.

"Having formed a new lower bottom recently at Rs 121, there is a possibility of further upside in the stock price towards new lower top formation. The overall chart pattern of SEQUENT indicates long trading opportunity", adds the brokerage report.

Disclaimer

The stock is taken from the report of HDFC Securities. Investors and readers should not construe the above report as investment advice and due to their own due diligence before taking any risky calls.