Aspen’s Tug of War Continues

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. 


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.  


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 

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