Pharma sector has been the darling not only of Mutual Fund Managers but also of the major retail investors. The Pharma stocks have delivered multibagger returns over the last few years and some of the counters from Mid & Small Cap categories have given multi-fold return in no time. The entire sector witnessed a very sharp bull run from 6400 levels up to 14000 mark. However during recent past some the counter from pharma space has taken nose-dive and have broadly under-performed the broader markets.
The CNX Pharma index has been facing resistance around 12000 levels. It successfully breached its resistance zone of 11700-11750 levels during recent past but could not capitalize the same today closed below its support level of 11400. The index has now entered a multiple support zone of 11300-11000 and the breach of the same on closing basis may lead further selling and may drag the index to 10800-10600 levels which is the major support zone for the index. Consecutive closes below 10700-10600 levels may add more pressure and we won't be surprised if the index 9800-9500 levels. For any sustained up-move consecutive closes above 12000 levels by the bulls are required. Traders can cautiously look for shorting select pharma stocks to benefit from the potential south-ward journey.
Extreme caution is necessary at this point as we have have already mentioned that it will be trading around multiple support zone.
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