As far as levels are concerned, 8,000 followed by 7,800 would be seen as immediate supports; whereas on the higher side, if market has to see some relief, the Nifty needs to surpass 8,300-8,400 convincingly. In the recent past, financial stocks have been facing terrible sell-off and this week too, we saw tremendous underperformance from this space. Moreover, it would be unfair not to mention the stupendous rally in Pharma stocks on the last day of the week. It has been the safe haven space for traders/ investors in the recent meltdown and now it increases the possibility of the multi-year pain ending for this basket.
NSE Scrip Code – SUNPHARMA
View – Bullish
Last Close – Rs 375.95
Justification – The entire Pharma space has been the knight in the shining armor for market participants in the recent carnage. This laggard sector has not only showed reluctance to fall but also gave stupendous rally in the last few sessions, especially on Friday. It would be too early to comment on this, but we may see early signs of revival for this basket after the underperformance of nearly five years. ‘SUNPHARMA’ gave a decisive breakout from key short term moving averages along with sizable volumes. Thus, we recommend going long for a positional target of Rs 404 in the coming days. The stop loss can be placed at Rs 357.
NSE Scrip Code – Just Dial
View – Bullish
Last Close – Rs 299.50
Justification – This stock has corrected sharply in the recent turmoil and in the process, posted its all time low of 250 in the last week of March. Looking at past few days’ price action, it appears that the correction has halted for a while. On Wednesday, we saw first sign of strength as prices managed to close above ‘5-Day EMA’ for the first time in last few weeks. In addition, the RSI-smoothened oscillator has confirmed a positive crossover in extreme oversold territory. Hence, we expect the stock to give some relief in next few days. Although, the market environment does not suit positions on the long side, we are advising this stock with strict stop losses. One can look to buy for a target of Rs 342 in the coming weeks. The stop loss can be placed at Rs 284.20.
Disclaimer: The author is Chief Analyst- Technical & Derivatives at Angel Broking. He may have positions in one or all of the above mentioned stocks. Views expressed are his own.