Divis Lab, Sun Pharma: Current breakout may lead Pharma index to new peak

Pharm index has broken out on upside, with the positive rally anticipated to hit 14,450

Pharma Index is poised to hit a new all-time high in the coming sessions, with a breakout of “Golden Cross”. A bullish pattern in which a shorter moving average converges with a longer moving average, steering a bigger up move in the same direction. 

On Monday, pharm index reached a new 52-week high, indicating a robust sentiment. Shares of NATCO Pharma, Granules India and Divi's Laboratories soared close to 2 per cent each. 

Here’s the technical outlook amid pharm index witnessing a rally to a new all-time high:-

Nifty Pharm

Likely target: 14,450

Upside potential: 5%

With the breakout of the “Golden Cross”, the index is poised to scale higher highs in the upcoming sessions. Unless and until 13,000 is breached, the trend is likely to see bullish bias on every correction rally. 

Stability over 13,700 shall see this index heading higher with firm underlying trend, as per the daily chart. The overall trend indicates that the positive rally is set to reach a new all-time high. The Relative Strength Index (RSI) has seen accumulation in its overbought territory implying underlying trend to favour bullishness. CLICK HERE FOR THE CHART

Aurobindo Pharma Ltd (AUROPHARMA)

Likely target: Rs 825

Upside potential: 15%

Following a rally over the 200-weekly moving average (WMA) placed at Rs 638, the stock has negated the “Death Cross” breakdown that occurred in last November.  The present breakout over the 200-WMA suggests a rally in the direction of Rs 825-mark.

Momentum indicator, the Moving Average Convergence Divergence (MACD) is gradually climbing upward over the zero line, suggesting that the momentum to remain resilient. CLICK HERE FOR THE CHART

Divi's Laboratories (DIVISLAB)

Likely target: Rs 4,000

Upside potential: 10%

A breakout over Rs 3,633-mark, its previous reversal level; could lead to an upward breakout to Rs 4,000-level. This shall also result in a breakout “Golden Cross”, emerged on the daily chart. The 200-DMA, which serves as a support exists at Rs 3,308.

The trend over the hurdle mark shall endure more bullish bias, with every decline to expect accumulation from a short-to-medium term perspective.  CLICK HERE FOR THE CHART

Sun Pharmaceutical Industries Ltd (SUNPHARMA) 

Likely target: Rs 1,200

Upside potential: 12%

While the broader trend in the shares of Sun Pharmaceutical Industries have become sideways, the stock has managed to leap over the 200-DMA suggesting that the underlying momentum is negating any major breakdown. 

Immediate hurdle falls at Rs 1,060-mark, with current price action indicating a rally to breakthrough this hurdle. When that happens, the bullish bias could head in the direction of new historic peak of Rs 1,200. CLICK HERE FOR THE CHART

Torrent Pharmaceuticals Ltd (TORNTPHARM)

Likely target: Rs 2,100

Upside potential: 10%

Shares of Torrent Pharmaceuticals are scaling fresh all-time highs, with a robust chart structure. The weekly breakout over Rs 1,100-mark triggered resilient upside two years ago, which the stock is firmly pursuing. 

The support for the current bias exists at Rs 1,700-level, with the stock price anticipated to reach Rs 2,100. The RSI indicator continues to see absorb selling pressure in its overbought category, implying a sturdy sentiment. CLICK HERE FOR THE CHART