Nifty Pharma may have bottomed out; Aurobindo, Glenmark can rally up to 10%

The Nifty Pharma index has crossed its near-term resistance at 13,700, and may spurt another 1.5 per cent.

Shares of pharmaceuticals companies were seen in demand on Monday, with the likes of Aurobindo Pharma and Glenmark surging 5 per cent and 4 per cent, respectively.

Other stocks like Strides Pharma Science,  Laurus Labs and Granules India also gained over 3 per cent each. Most stocks in Nifty Pharma index were trading with the positive bias.

The Nifty Pharma index had declined 17 per cent decline from its all-time high of 14,398 level in the recent sell-off. The index is likely to see some upside in the near term, with more promising returns see in select pharma shares.

Here's what the charts have to say:

Nifty Pharma
Likely target: 13,908
Upside potential: 1.50%

The index in the past had conquered the resistance at 13,700-level, and is set to rally further as the Moving Average Convergence Divergence (MACD) has successfully managed to surpass the zero line. The index is likely to head towards its 200-DMA placed at 13,908 level, daily chart shows. The support for the index lies at 13,500 level. CLICK HERE FOR THE CHART

Aurobindo Pharma Ltd (AUROPHARMA)
Likely target: Rs 725
Upside potential: 8%

The stock crossed the major hurdle of Rs 660 in the early hour of the session. The up move gained momentum and strength with increased volume, suggesting a bullish bias for traders and investors. In the future, as long as the support of Rs 640 is protected, the positive trend could see Rs 700 as the immediate reach, followed by Rs 724, which is its 200-day moving average (DMA). CLICK HERE FOR THE CHART

Strides Pharma Science Ltd (STAR)
Likely target: Rs 380
Upside potential: 8%

The stock seems to breakout of “Double Bottom” at Rs 340, shows the daily chart. The stock that sharply fell to its new 52-week low of Rs 304.20 and was down almost 70 per cent from the last year high of Rs 943, seems to now show some revival in trend. The next obstacle for the stock falls at Rs 380 level, with support seen around Rs 342. CLICK HERE FOR THE CHART
 
Glenmark Pharmaceuticals (GLENMARK)
Likely target: Rs 490 and Rs 510
Upside potential:  7% to 10%

One can view the formation of “Inverse Head and Shoulder” on the daily chart. A breakout above Rs 460 with robust volume indicates a likely shift in trend for the stock. The Relative Strength Index (RSI) is firmly placed with a positive crossover, signalling strength and momentum in favour of bulls. The support for the stock exists at Rs 440 and the bullish breakout could see a rally towards the Rs 490 and Rs 510 levels.  CLICK HERE FOR THE CHART

Laurus Labs Limited (LAURUSLABS)
Likely target: Rs 650
Upside potential: 9%

In the past three months, the stock crossed the 200-DMA several times, but failed to carry forward the upward bias. Now, as it manages to sustain above the 200-DMA, presently set at Rs 575, the breakout could see a short covering resulting in a massive rally in the direction of Rs 650 level. CLICK HERE FOR THE CHART