Pharmaceuticals giant Aurobindo Pharma reported their first quarterly earnings on Thursday 11th August 2022.

The consolidated net profit was at Rs 521 crore which is down by almost 32 percent in comparison with the first quarter of the last year. Revenue from Sales were up by 9 percent on a Year-on-Year basis.

The company is focused on the development of specialty products pipeline which can establish new ways to grow the business for the future. The company aims to bring in sustained improvements in profitability through new modes which will enhance the company’s profits over the long term.

The revenue from US business increased by 11 percent to Rs 2971 crore and it accounts for 47 percent of the consolidated revenues.

European business revenue decreased by 2 percent at Rs 1548 crore. European revenues account for 25 percent of the consolidated revenues.

Technical Analysis

AUROPHARMA Monthly Candlestick Chart on Sharekhan’s Trade Tiger

Let us look at the technical insights for Aurobindo Pharma. The stock had corrected severely in the 2020 crash and it had taken support at the 61.8% level in 2019 and 2020. Currently, the stock seems to be taking heavy support at the 50% retracement level priced at Rs 537 as this was a strong support level back in May 2017 and March 2018. The monthly MFI is 32 as of 12th August 2022. The stock has hit the 52-week low of Rs 503 recently. Considering all the technical analysis, Aurobindo Pharma is an excellent long swing trade for the medium to long term.

Stock Price Manipulation

The stock opened flat on Friday 12th August 2022, the day after the earnings results were declared. Option Writers gained the maximum benefit who traded the options for this stock. However, the operator of this stock decided to gain more contracts by taking the stock price up. The stock was up by 5 percent with a high of Rs 604 around 10:45 am on Friday. The results were bad, still the stock soared high. It seems illogical that the stock price went up.

If we look at the open chain for Auro Pharma, the call option of AUROPHARMA 25-Aug-2022 CE 600 had the Open Interest High of 1592000 on Friday.

Market Depth of AuroPharma Call Option CE 600

This call option strike still has the highest open interest. The call option had the premium high of 20.05 and currently the premium closed at LTP 11.20. This denotes that the operator presence is very strong at this price level and Auro Pharma might face heavy resistance to break out over Rs 600. Now observe the price of Auro Pharma on the candlestick chart for Friday and notice how the price was well defended at the mark of Rs 600.

Intraday Candlestick Chart of AuroPharma for Friday 12th August 2022

This is proof of the operator manipulating the stock price to gain maximum out of the option buyers. It would not be surprising if the premium of the call option of CE 600 would expire worthless by the expiry date of 25th August 2022.

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