Aspen Pharmacare Holdings Limited (JSE: APN) has showcased resilience with a 30% appreciation over the past year despite a brief dip of nearly 4% in January 2024. The pharmaceutical giant unveiled ambitious plans in December, outlining its strategic move to amplify its footprint in China. The acquisition of the Chinese business of Swiss group Sandoz, valued at up to €92.6 million ($100.6 million), positions Aspen Global Incorporated, a subsidiary of Aspen, to secure selling and intellectual property rights for a lucrative product portfolio featuring established products like Sandostatin and Aclasta.
This strategic manoeuvre reflects Aspen’s determined pursuit of expanding its influence in the lucrative Chinese market. The market responded positively initially, propelling the company’s share price to promising heights. However, recent fluctuations have introduced an element of uncertainty, creating a battleground between bullish and bearish sentiments. The climax awaits with the eagerly anticipated earnings release scheduled for March 4th, which is poised to unveil the next chapter in Aspen’s captivating narrative.
Technical
On the daily chart, a breakdown occurred at the ascending channel, resulting in a breakdown below the 25-SMA (green line) and 50-SMA (blue line). Support at R188.73 has held firm so far and could be the pivot point needed to initiate a retracement of the recent downturn.
If the price can reverse and push above the R195.32 level, a retest at R200.13 near the 25-SMA could occur. Here, the price could either fall back down, confirming the recent breakdown or continue its ascent toward R206.27, which could signal a return of the bullish momentum.
However, if the price falls below R188.73, the bearish shift could be sustained. In this case, the Fibonacci midpoint at R183.39 and the 100-SMA (orange line) near R181.78 could be worth watching before the 61.8% Fibonacci golden ratio could come under the spotlight at R178.08.
Summary
With a recent breakdown in its share price, Aspen Pharmacare looks to recover and continue the impressive momentum shown in 2023. Support at R188.73 could be pivotal in the upcoming sessions to gauge whether the bearish momentum could be sustained below this level.
Sources: Koyfin, Tradingview, Aspen Pharmacare Holdings Limited, Reuters
Piece written by Tiaan van Aswegen, Trive Financial Market Analyst
Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.
Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.
CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.
