Nifty Pharma outperforms, frontliners gain on news
When the entire market is in doldrums with weakness prevailing in the benchmark indices, Pharma sector has escalated by 2.9 per cent. Sun Pharma which holds 26 per cent weightage in the Nifty Pharma index has surged 6.8 per cent at 12:11 hours. Dr Reddy and Auro Pharma which hold 13 and 7.7 per cent, respectively are with more than 3 per cent plus gains each. Sun Pharma and Dr Reddy are the top gainers of Nifty 50 too.
The buoyancy is on the back of Auro Pharma receiving USFDA final approval to manufacture Omeprazole Delayed Release 20 mg tablets. The tablets are equivalent to Astrazeneca’s Prelosec OTC tablets and belongs to the heartburn medication segment. Auro is expected to launch the same in June itself.
Thereby, all the above mentioned stocks which were already off their recent lows have witnessed a consolidation breakout in Friday’s session. Nifty Pharma index had retreated from near to 8550 during May 28 and 29, i.e. from 50 per cent retracement of the prior downward rally from 9110 to 7900 levels.
However, the index bounced back taking support at 8019 i.e. above its low at 7900. On Friday, the index traded above its 50-days EMA level. Hence if the price sustains, we hold 8555-8600 followed by 8650 as the resistances. However, in case its just a pullback as volumes are not supporting price rise, then we hold 8330-8215 as the supports.