Laurus Labs Ltd rallied by about 50 per cent in the last one year compared to over 14 per cent upside seen in the Nifty50 and 17 per cent gain seen in the S&P BSE 200 index in the same period.

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The pharma company with a market capitalization of more than Rs 29000 cr hit a 52-week high of Rs 723.55 on the BSE on 12 August and the trend turned sideways post August.

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The stock fell by nearly 40 per cent from the high to find support near 450 levels in November before bouncing back.

Laurus Labs is principally engaged in offering a broad and integrated portfolio of Active Pharmaceuticals Ingredients (API) including intermediates, Generic Finished dosage forms (FDF), and Contract Research services to cater to the needs of the global pharmaceutical industry.

The recent price action suggests that bulls have taken control and pushed it back above the 200-Days EMA placed around Rs 520 which is a positive sign for bulls.

The stock also formed a double bottom reversal pattern which suggests more upside in the offing that could take it towards Rs 640-660 levels translates into an upside of 20 per cent from Rs 550 recorded on 11 February in the next 6-9 months, suggest experts.

A double bottom pattern signifies a potential change in the trend. It is formed when the price of the underlying which could be an index or a stock drop and then rebounds. The pattern repeats again in which price drops and then rebounds and breaches the breakout level on the upside.

“Stock price touched a high of 723 in mid-August last year and then declined to touch low of 440. Over the last three and half months it has formed a bullish double bottom reversal pattern on the daily chart between 440-555 odd levels,” Ashish Chaturmohta, Director, Equity Research, Sanctum Wealth, said.

“Bounce in the stock from the 2nd low has been on high volumes indicating accumulation at lower levels,” he said.

Currently, the stock is trading at the breakout level. Looking at the price structure and volumes action stock is likely to see a breakout on the upside.

“The stock can be bought at current levels and on dips to 535 with a stop loss of 515 for the target of 640-660 in the coming 6-9 months,” recommends Chaturmohta.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)