Cipla, Biocon, Divi's Lab: Pharma stocks to bet on in the current market

Cipla may see profit-booking around Rs 360 to Rs 367 levels, as per the weekly chart.

Pharma stocks have been the flavour of the season ever since the outbreak of the Coronavirus (Covid-19). According to a report by Business Standard, despite a nationwide lockdown that disrupted the distribution of drugs across the country and fresh prescription generation, pharmaceutical sales in March registered an 8.9 per cent growth. This was primarily on account of panic buying of medicines in the chronic categories. As a result, shares of pharma companies, too, witnessed an upswing.

Here's a look at how the Nifty Pharma index and key pharma stocks look on technical charts and how you should trade them - 

NIFTY PHARMA: The index witnessed a tremendous rally in the last four sessions - up over 20 per cent. A formation of “Inverse Head and Shoulder” pattern may be seen on the daily chart. Broadly, if the index manages to close strongly above 9,000 levels, which is its resistance level, then it may see further upside towards 9,400 and 9,700 levels. The immediate support comes in at 8,550 and 8,200 levels. CLICK HERE FOR THE CHART

Biocon Ltd (BICON): The counter is Rs 15 away from the lifetime high of Rs 359 levels. This high may be surpassed as the trend in the last three sessions remained healthy. During the recent deep correction in the frontline indices, the stock did not break 200-weekly moving average (WMA) and an upside toward lifetime high suggests more buying opportunities in the near future. The support remains at Rs 300 levels and a rally towards Rs 380 cannot be ruled out. CLICK HERE FOR THE CHART

Cadila Healthcare Ltd : The counter has seen an enormous rally, which may see profit-booking around Rs 360 to Rs 367 levels, as per the weekly chart. That stated, the overall trend remains bullish and any downside correction may see the emergence in buying momentum. The support remains at Rs 320 levels as per the daily chart. CLICK HERE FOR THE CHART

Cipla Ltd (CIPLA): The counter has crossed all the moving averages such as 50-day moving average (DMA), 100-DMA and 200-DMA decisively, indicating a firm underneath strength. A robust rally from Rs 425 levels to Rs 600 may see some profit-booking as Relative Strength Index (RSI) enters an overbought condition, yet the corrective moves may see addition in longs. The outlook remains positive with volumes supportive of further upside for a short-to-medium term trend. CLICK HERE FOR THE CHART

Divi's Laboratories Ltd (DIVISLAB): The counter has hit a new lifetime high of Rs 2,293 level. A breakout above Rs 2,040 on a closing basis has driven the price to the strong levels. One can anticipate a rally towards 2,500 till Rs 2,160 holds on the closing basis. The overall trend remains bullish and the positive sentiment may stay strong as Moving Average Convergence Divergence (MACD) has crossed the zero line upward with a positive crossover, as per the daily chart. CLICK HERE FOR THE CHART

Glaxosmithkline Pharmaceuticals Ltd: This counter has made two bottoms around Rs 960 – Rs 970 levels, as per the daily chart. A strong reversal with a formation of “inverse head and shoulder” on the closing basis has embarked a new upward rally. The overall trend suggests that the counter chould accomplish Rs 1,500 level on an immediate basis. The support remains at Rs 1,200 and Rs 1,150 levels. CLICK HERE FOR THE CHART