Nifty Pharma Outlook: A Healthy Correction or Start of Something Bigger? - 05.04.2025
Nifty Pharma Outlook: A Healthy Correction or Start of Something Bigger? - 05.04.2025
K Karthik Raja (Market Educator & Technical Analyst)
K Karthik Raja (Market Educator & Technical Analyst)
MCA | MBA | M.Com | MSc Psychology | PGJMC | CST | MDAT | CFA Pursuant
Key Factors Affecting & Reasons:
- Recent correction triggered by profit booking after a strong multi-quarter rally
- Margin pressures easing with declining input costs and better operating leverage
- Regulatory developments in the US (FDA approvals, pricing pressure) affecting sentiment
- FII flows returning to pharma due to its defensive nature amid global uncertainties
Key Watch:
- Resistance at 21,450 – a crucial level to reclaim for bulls
- Support zone between 19,500 and 20,000 – critical for trend continuation
- Watch for RSI moving above 50 and MACD confirmation
Volume Analysis:
- Decreasing volumes on the correction indicate lack of strong selling pressure
- Recent green volume bars near support levels suggest accumulation
Dow Theory Chart Analysis & Observations:
- Long-term trend remains intact with higher highs and higher lows
- Pullback is currently testing the 50-week moving average, historically a strong bounce zone
- Momentum indicators (RSI, MACD) are showing early signs of reversal
Stocks to Watch:
- Sun Pharma – Leading strength in the large-cap space
- Dr. Reddy’s – Showing base formation with rising volumes
- Cipla – Watch for breakout above recent resistance
- Divi’s Labs – Technical bounce likely from an oversold zone
Market Insights:
Short-Term View (1–3 months):
Expect consolidation between 20,000–22,000 with a potential breakout if sentiment improves
Long-Term View (6–12 months):
If the current support holds, expect a gradual move toward the 24,500–25,000 zone
Disclaimer:
This article is for educational purposes only and does not constitute financial advice. Always consult with a registered financial advisor before making any investment decisions.
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