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ICICI Direct recommends buy on Lupin in the range of Rs 750-765 and the 3-month target price is set at Rs 870 while the stop loss is placed at Rs 690.
Lupin, Torrent Pharma, Marico and Torrent Power are ICICI Direct's quant picks in its research report dated September 5. Analysts at the brokerage are of the view that the pharma space may see an uptrend in coming weeks, particularly Lupin.
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The pharma major's share has witnessed short covering since the June series. In the first round of recovery in June, Lupin shed almost 30 percent of positions while it moved towards Rs 800, the report said.
Since the July series, Lupin has shed another 15 percent open interest indicating ongoing short covering in the stock. ICICI Direct believes fresh momentum may be seen in the stock if it is able to move above Rs 780.
The brokerage recommends 'buy' on Lupin in the range of Rs 750-765 and the 3-month target price is set at Rs 870 while the stop loss is placed at Rs 690.
In the options space, the highest call option of Lupin was placed at the 760 strike for the September series, the report said. The upside bias in the pharma stock is likely to continue as short positions are moving into deep OTM strikes towards 800 call strike of the September series itself, it added.
Lupin has seen a significant increase in delivery based activity around Rs 775 in the May series, the brokerage said. Lupin's long term mean is placed around Rs 830 which is likely to be tested in the near term, it added.
Torrent Pharma's target price is set at Rs 1,930 and the stop loss is placed at Rs 1,490. Marico's target price is Rs 445 and stop loss is at Rs 342. Torrent Power's target price is Rs 340 and stop loss at Rs 272.
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