Pharma stocks upbeat amid Covid-19 scare; Divi's, Lupin can gain up to 10%

Technically, the Nifty Pharma index needs to immediate hurdle at 13,500, for further upside to 14,250.

Stock markets across the globe this traded on a jittery note amid reports of fresh spike in COVID-19 cases across China, and also cities in the US, Europe and Japan. The Indian markets slipped over 2 per cent in the previous two trading sessions and have plunged 4.7 per cent from the all-time high recorded at the start of this December. 

Even as the US benchmarks, Dow Jones and Nasdaq trade in green for the current week, both the indices were 4 per cent lower from their recent 3-week highs. Similarly, FTSE in UK, DAX in Germany and CAX in France have declined up to 4.50 per cent each from their most recent weekly summits.
 

On Friday, the domestic benchmark indices, BSE Sensex and Nifty 50 breached the sentimental mark of 61,000 and 18,000 levels, respectively, raising concerns over the next trajectory by the end of the calendar year 2022.

Central government has also issued “guidelines for International arrivals”, amid surging covid-19 case globally, which shall come to effect from December 24.

Prime Minister Narendra Modi had on Thursday cautioned people against complacency and urged them to wear masks in crowded places while also directing officials to strengthen surveillance measures, especially at international airports. 

Amid these developments, the health ministry on Friday has approved Bharat Biotech's intranasal Covid-19 vaccine for 

inclusion in the vaccination programme as a booster dose for those above 18 years of age. The needle-free vaccine will be available at private centres. It will be introduced on the Co-WIN platform on Friday evening. READ MORE

So far this week, major pharma giants have outperformed the markets on hopes of possibile rise in medical needs. Among individual stocks, Divi's Laboratories has soared over 9 per cent, Lupin has surged 6 per cent and Glenmark Pharmaceuticals has added 5 per cent. The Nifty Pharma index was up 3 per cent, the most since the last two months in a single week. 
 

Going ahead, here's a technical outlook on select pharma stocks to help you understand the next likely move:-

Nifty Pharma

Outlook: Breakout over 13,500 shall lead to 14,250

While the pharma index has negated the “Falling Channel pattern” at 13,250 level, on the weekly chart, the positive trend needs to retrieve strength to rally further. Chart denotes immediate hurdle at 13,500, which needs to be taken out, with aggressive volumes. As of now, the cushion that is bolstering the upward bias stays at 12,500-mark. As long as the index holds this support, the trend is likely to stay buoyant. A breakout over 13,500 shall see an upside to 14,250 level. CLICK HERE FOR THE CHART

Divi's Laboratories (DIVISLAB)

Likely target: Rs 3,774

Upside potential: 5%

A consolidation breakout from Rs 3,200 - Rs 3,400 range, has led the stock to enter a short-term bullish trend, which seems to indicate an upside target of Rs 3,774, its 200-day moving average (DMA). The immediate support for the stock is seen at Rs 3,500 level, followed by Rs 3,450-mark. The current trend points to a resilience, owning to the bullish pattern breakout.  CLICK HERE FOR THE CHART

Cipla Ltd (CIPLA)

Outlook: Breakout over Rs 1,150

Shares of Cipla are within striking distance of the barrier at Rs 1,150 mark. As and when the stock breaks this barrier, the upside rally shall head in the direction of a new all-time high at Rs 1,200. The immediate support for the stock is seen at Rs 1,100 level. The candlestick formations are supportive of the upward bias, as long as the stock defends the said key mark. CLICK HERE FOR THE CHART

Granules India Ltd (GRANULES)

Likely target: Rs 370

Upside potential: 9%

This could be a case of bottom formation for the Granules stock, as the Relative Strength Index (RSI) strongly holds the breakout over its 40 value. Positive divergence may propel this stock in the direction of Rs 370 - Rs 375 levels, which was the key barrier range back in July this year. At the current juncture, on price-action basis, the support for the stock exists at Rs 320 level. CLICK HERE FOR THE CHART

Lupin Ltd (LUPIN)

Likely target: Rs 850

Upside potential: 10%

The “Higher High, Higher Low” formation continues to scale upper levels, with underlying momentum firmly supporting the positive bias. In addition, the “Golden Cross” of the 50-DMA, 100-DMA with 200-DMA has pulled more upward strings, indicating stock a possibility of the stock to reach Rs 850 in coming sessions. Support for the stock is at Rs 750 and Rs 720 levels, according to the daily chart. The overall scenario points to a steady upside, with healthy correction to see buying accumulation. CLICK HERE FOR THE CHART