Big Pharma is going green globally, and South Africa’s largest pharmaceutical producer, Aspen Pharmacare Holdings Limited (JSE: APN), is no different.
Aspen has been taking on its own climate-related issues head-on, and with SA’s energy crises firmly thrust to the foreground, Aspen plans to move away from Eskom’s power grid. The pharma giant plans to purchase electricity from third-party suppliers generating energy from waste plastic and is set to do all this within 18 months.
Technicals
The price action on SA’s favourite pharma company has been consolidating sideways for the last nine months, with the primary resistance and support levels firmly at R162.00 and R132.00, respectively. Looking at the 4H chart of Aspen, we can see a symmetrical triangle pattern formation, which could signal a breakout in either direction, while volume is also moving lower.
For the bull case, a short-term trading opportunity could exist if the price action pushes above R153.22 (black dotted line), which could be the first resistance point in the price for the bulls. After the price breaches the resistance, the possibility exists, supported by volume, that price could reach R160.00 (green line), a share level towards the primary price resistance of R162.00.
The bears would be looking towards a lower breakout of the triangle, from the R142.16 support level to the next level of support around the R136.14 (red line) share level.
Summary
Depending on how the market perceives the news of Aspen’s latest “Green” endeavours, the possibility could exist for a long above R153.00 to the next significant resistance at R160.00. For a lower triangle, the breakout price could potentially move lower to R142.00 and R136.00, respectively.
Sources: Aspen Pharmacare Holdings Limited, BusinessDay, TradingView.
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