[Premium] Pharma Continues to Shine
Let’s begin by looking at the sectoral performance and strength as a whole in this sector. Nifty Pharma is currently placed above its 2016 highs and is also comfortably consolidating above support near 11,000. After a minor halt, the index appears to be on the move again.
On a relative basis too, the index is halting at a multi-year support level with RSI staying well out of the oversold regions during this corrective period.
Now let’s take a look at the setups with skewed reward/risk potential at current levels.
Dr. Reddys has been in a strong uptrend and has been stable above its 2015 highs. We want to be long in this counter if it's above 4680, for medium-term targets of 5400 and 5900.
Next up is Cadila Healthcare, which is consolidating above its 2018 highs, with the RSI placed in the overbought region indicating bullish momentum. We are positive in this counter above 450, for a target of 555.
Lupin is also on our radar, which has been bouncing from levels of 875. As long as prices continue to respect this support level, we can look for 1130 in the weeks and months ahead.
Alembic Ltd has been one of the star performers this year. After a brief halt, the counter looks like its ready to move again. We are bullish in this stock above levels of 90, for targets of 120 and 135.
Alembic Pharmaceutical is also showing strength post its strong breakout above 1030. With this level of risk management in mind, we are looking at 1400 in the months ahead.
JB Chem Pharmaceuticals is another counter with a strong setup and looks ready for its next leg higher. We are bullish in this counter above 950, for a target of 1390 in the months ahead.
Next up we have Sequent Scientific which has broken above its resistance of 154 and is holding on to these levels with the RSI reaching overbought levels. We are positive above the level of 154, for a move towards 222.
Last on the list is Wockhardt Pharma which has breached its resistance level at 475. The stocks has continued to remain in the overbought zone signaling at its inherent bullish momentum. We are positive in this counter above 475 for a target of 680.
While the Pharma Index has run up quite a bit, signs of longer-term exhaustion aren't visible yet. The above stocks match our reward/risk requirement and can be looked into at current levels.
Thanks for reading and please let us know if you have any questions.
Allstarcharts Team