Nifty Pharma Index – alive and kicking

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The Nifty Pharma index is underperforming the benchmark NSE Nifty index since September 2020 after the new normal.

In our previous note, we had highlighted that the break above 14,000 will take the index higher, but it is trading in the range of 13,300-13,700 so far.

Pharma Index/Nifty50 at Reversal Level

As the pharma index is struggling to cross 14K levels, the ratio chart of Nifty Pharma/Nifty50 indicates the recovery in health for Pharma index.

Pharma Index/Nifty50 at Reversal Level

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Pharma Index/Nifty50 at Reversal Level

The Bullish Gartley harmonic reversal pattern is visible on weekly chart and an outperformance of Pharma index over Nifty in past few weeks confirms the reversal.

The positive crossover of averages in oversold zone on MACD signs a healthy structure for Pharma Index.

Who can lead Pharma Index?

Sun Pharma and Cipla are trading near their 52 week highs while Divi’s Lab, Lauras Lab & Aurobindo Pharma witnessed an uptick in outperformance against the pharma index recently.

On cross of 14,000, the pharma index will be in a sweet spot for investors.

Currently, the Nifty pharma index is trading at 13,560 levels, down 0.3%.

From the index, Cipla and Lupin are the top gainers. While Dr Reddy’s Lab and Torrent Pharma are among the top losers.

Note that pharma stocks have been in focus of late as companies which are exporting drugs seem to be benefitting amid the ongoing geopolitical tensions.

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Disclaimer:  This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

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