The current market environment remains choppy, so we want to revisit a sector that's showing relative strength, Pharma.

In November we pointed to the improving prospects of the Nifty Pharma Index and its components, following up with additional trades in January.

Today, we want to revisit the sector to see what's changed and what stocks we want to be buying and selling.

First, let's start with the Nifty Pharma vs Nifty 500 ratio chart that continues to turn higher after meeting our downside objective late last year. This continues to suggest further outperformance from the Nifty Pharma sector relative to the broader market.

Click on chart to enlarge view. 

Today we wrote a post updating our market view, which is that we expect further chop but are looking to put cash to work slowly on the long side. In that post we outlined what we'd need to see to get aggressively long, so please check it out.

This post is going to outline several stocks that are presenting attractive reward/risk scenarios at current levels, so if you need long exposure this is where we want to be.

As stocks around the globe slump, we're seeing another failed breakout attempt in one of India's largest sectors.

Let's take a look at what it means and what it's going to take for it to finally sustain new highs.

First, let's start with the Nifty IT Index on an absolute basis. Last week prices pushed above resistance near 16,500 to new all-time highs, but momentum diverged negatively and prices are now confirming a failed breakout...suggesting more time is needed to work through this overhead supply and continue its long-term trend to the upside.

Click on chart to enlarge view.

Today we wrote a post discussing the concept of relative strength and how it's kept us on the right side of several trends over the last few years.

Now we're going to apply that analysis to the Nifty Media sector to identify if the struggling group is nearing a turning point.

Let's take a look.

Roughly 2 months ago we outlined why there was potential for strength and outperformance from the Nifty Pharma sector and its components.

We've gotten some nice moves since then and given the rotation we're seeing in other areas of the market like Consumer Goods and Technology, the charts are suggesting Pharma stocks are getting ready to accelerate to the upside.

Here's the Nifty Pharma Index, which confirmed a failed breakdown and bullish momentum divergence by closing back above support near 8,000. That defined our risk on the long side and skewed the reward/risk very much in our favor. It's worked well so far and we're now seeing prices accelerate off support and towards our 10,300 target.

Click on chart to enlarge view.

The Large-Cap indices continue to churn near the highs as Mid and Small-Cap stocks play catchup. Sector leadership remains clear, but we're now beginning to see signs that a former leader turned laggards may start heating up again.

Earlier this week we looked Consumer Goods before they broke out and Technology looks to be showing similar signs of buying pressure.

Let's take a look.

Here's the Nifty IT Index attempting to break back above 16,200 resistance as momentum finally breaks back into overbought territory. If prices can break decisively above resistance then this long-term uptrend could accelerate and target 18,775 over the next few quarters.

Click on chart to enlarge view.

The Large-Cap indices continue to churn near the highs as Mid and Small-Cap stocks play catchup. Sector leadership remains clear, but we're now beginning to see signs that a former leader turned laggards may start heating up again.

Let's take a look.

Here's the Nifty Fast Moving Consumer Goods Index attempting to break back above 31,000 resistance as prices reverse from their lows and momentum diverges positively. If prices can break back above that resistance then this long-term uptrend could accelerate and target 39,000 over the course of 2020.

Click on chart to enlarge view.

As we head into 2020, we start from scratch with our Q4 playbook and outline our thoughts on every asset class and our plan to profit in the quarter (and year) ahead.

Part 1 of this playbook will cover our macro view, touching on Equities, Commodities, Currencies, and Rates.

Part 2 of this playbook will delve deeper into Indian Equities, going sector by sector to identify the trends that matter.

Part 3 of this playbook will outline the individual stocks we want to be buying and selling within the context of today's environment.

As we head into 2020, we start from scratch with our Q4 playbook and outline our thoughts on every asset class and our plan to profit in the quarter (and year) ahead.

Part 1 of this playbook will cover our macro view, touching on Equities, Commodities, Currencies, and Rates.

Part 2 of this playbook will delve deeper into Indian Equities, going sector by sector to identify the trends that matter.

Part 3 of this playbook will outline the individual stocks we want to be buying and selling within the context of today's environment.

As we head into 2020, we start from scratch with our Q4 playbook and outline our thoughts on every asset class and our plan to profit in the quarter (and year) ahead.

Part 1 of this playbook will cover our macro view, touching on Equities, Commodities, Currencies, and Rates.

Part 2 of this playbook will delve deeper into Indian Equities, going sector by sector to identify the trends that matter.

Part 3 of this playbook will outline the individual stocks we want to be buying and selling within the context of today's environment.