Pharma Sector

Nifty Pharma Index in the only sector which had outperform the overall market in last 3 months, although I don’t believe fundamentally anything got change to justify this outperformance but might be participants are finding pharma sector to be relatively safer to park their money in short-medium term or market is discounting something in advance.

Pharma sector long term trend seems to be reversed, now in medium term till Nifty Pharma Index stays above 8000-8500 level, we will see buy on dips in pharma sector which can take it to 10700-10800 levels. In last 4-6 weeks, this sector was into consolidation which now seems to have broken on upside at current level of 9600.

It’s seems to be genuine break out, as we have observed volume in cash market along with open interest in Future segment has increase in last 3 days. Even option data suggest the support and resistance are continuously moving upward, although basis in Futures are still negative.

As overall market is into make or break zone, we suggest short term traders can build long positions in pharma stocks with keeping a stop loss of 9000 on Nifty Pharma Index.