Sun Pharma, Divi's Lab, Piramal Enterprises: Time to bet on pharma stocks?

A bullish divergence on RSI favours the upside momentum along with MACD, which is in a positive crossover

Nifty Pharma: The formation on the daily chart resembles 'Double Bottom'. A breakout may indeed lead to a sharp upside in the index, provided volume supports the move. That said, stability above 8,200 levels is crucial. A strong decline from 9,400 to 7,800 in just three months had disrupted the upside potential, so follow-up buying should play a crucial role in formalising an upward trend. CLICK HERE FOR DETAILED CHART VIEW
 
A bullish divergence on RSI (Relative Strength Index) also favours the upside momentum along with MACD (Moving Average Convergence Divergence), which is in a positive crossover rising towards zero line. The support comes at 8,000 levels with an immediate resistance of 8,300 levels, which also is the 100-day moving average (DMA).

 
Sun Pharmaceutical Industries (SUNPHARMA): A gap-up close today may suggest a breakout on 'double bottom' formation, as per the daily chart pattern. There is no doubt that the major technical indicators RSI and MACD are signalling an upside, a strong close with a significant rise in volumes may lead to Rs 430 initially and then to Rs 460, which is its 200 DMA. The overall trend indicates a limited downside whereas the upside potential is high over the medium-term. Any correction should eventually see buying opportunities emerge.  CLICK HERE FOR DETAILED CHART VIEW

 
Divi's Laboratories (DIVISLAB): This is one of the stocks that have not seen much weakness in the Nifty Pharma index. As the chart shows, 200 DMA is strongly acting as a support for the positive trend, which is currently placed at Rs 1,550 levels. The 100 DMA is placed at Rs 1,644 levels, which is also acting as a strong resistance. In case the counter manages to conquer this, a breakout may lead to Rs 1,730 and Rs 1,780 levels going ahead.  The MACD has crossed zero line upward indicating a positive bias for the stock. CLICK HERE FOR DETAILED CHART VIEW

 
Piramal Enterprises(PEL): The stock is currently trading in a tight range of Rs 1,900 – Rs 2,100. This co-insides with 50 DMA placed at Rs 2,071 levels. Only a breakout above Rs 2,100 may take this counter to Rs 2,260 – Rs 2,300. RSI and MACD, which are trading in positive crossovers, also support this move. The overall scenario looks bullish, as the stock is continuously making an effort to climb Rs 2,100 levels. CLICK HERE FOR DETAILED CHART VIEW