Nifty Pharma Feeling Better?

JC Parets
December 29, 2021

We've been talking about how the major strength in the current market has been coming through in IT. But what we also noticed is that while Nifty Pharma wasn't looking pretty on an absolute basis, the relative strength is pointing in a different direction.

Pharma has been gaining our attention for the past few weeks. This post will see if broad participation is back in Pharma or just a few value weightage stocks are gaining higher.

Nifty Pharma has been range-bound all year now. Did you realize we're at the end of the year already?! Anyway, Pharma has underperformed all Nifty Sectoral Indices with an average drawdown of 26% when it comes to the Nifty 500 Pharma stocks.

When you look at the bottom pane of the chart, you will see that over the past two months, Pharma has been making a base relative to Nifty 100.

In such cases where the strength is concentrated in a few stocks, we look at the relative performance of the stock and focus on the ones that are displaying strength.

Due to the index's sideways consolidation nature, stocks we're positive on are based upon the prior trend. This means we're looking for continuation patterns that have outperformed the index in its drawdown period.

Click on the chart to zoom in.

Let's take a look at some of the stocks that are faring better than their peers.

Sun Pharma has the highest weightage in the Pharma index. When we look at a medium-term time frame, the stock is outperforming the index. Notice that the indicator is in the bullish regime.

We are positive above 740 with the first target of 860, and the next target is 950.

Torrent Pharma looks like it's posing for a breakout. We're long above the risk management level of 3,190 with a target close to 3,612.

Gland Pharma is a newly listed stock. It's among the top 10 pharma Nifty Pharma stocks. We're positive above the risk management level of 3,925 with a target of 4,316.

Ajanta Pharma is trading just above the big base breakout level. We're bullish as long as it remains above 2,125 with a target near 2,928.

Caplin point is also trading above a similar breakout level. We're bullish above 784 with a target of 1,160.

Indoco Remedies had a throwback on a 6-year base breakout level. We're positive as long as it stays above 399 with a target of 618.

Most Pharma stocks are yet to display a momentous resolution. We have to wait to see if the recent bounce back is sustainable or just a part of the higher lows progression.

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team

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