Index to watchout for next week: Pharma Index. For the past few weeks we have been trying to understand how to use the performance of an index reflects in performance of stocks that are constituents of that particular index and vice versa. By catching the index that is on the verge of breaking out or has broken out during the week, we can plan our investment and trades around it to maximize our returns. We spoke about Bank Nifty, then IT Index. Both gave considerable returns in the last 2 /3 weeks. The index that look most interesting this week end is Pharma Index.
Pharma index has given a powerful breakout and has closed above very important fibonacci resistance (20380) this week. The closing of Pharma index this week was 20453.85. The next 2 Fibonacci resistances for Nifty will be at 21013 and 21475. Supports for the Pharma index remain at 19936 and 19397. 19397 is a mega support which has a combined power of Fibonacci, Mid-channel and 50 days EMA.
The stocks that constitute the Pharma index are: Lupin, Dr.Reddy's Lab, Torrent Pharma, Alkem Lab, Biocon, Divi's Lab, Sun Pharma, Cipla, Zydus Life and Aurobindo Pharma. Some Peripheral Pharma stocks can also be looked at for investment purpose. We are not giving a buy or sell call on any of these companies. This is just an educational article explaining the potential moves of Pharma Index, how it can move in either direction and what can be the technical reasons behind the same.
Disclaimer: There is a chance of biases including confirmation bias, information bias, halo effect and anchoring bias in this write-up. Investment in stocks, derivatives and mutual funds is subject to market risks, please consult your investment advisor before taking financial decisions. The data, chart and other information provided above is for the purpose of analysis and is purely educational in nature. The names of the stocks or index levels mentioned in the article are for the purpose of education and analysis only. Purpose of this article is educational. Please do not consider this as a recommendation of any sorts.
