The Nifty Pharma index was quoting above its 200-Day Moving Average (200-DMA) after a gap of two months. Similarly, select pharma stocks such as - Biocon, Cipla, Zydus Lifesciences and Gland Pharma too are seen trading above their respective 200-DMAs.
The 200-DMA, also commonly referred to as the long-term moving average, is a key technical indicator which helps in determining the long-term trend of the particular underlying security. Stocks or indices quoting above the 200-DMA are considered as bullish (positive) and vice versa.
Here's a detailed technical analysis on today's breakout stock - the Nifty Pharma index and 4 healthcare stocks now trading above the 200-DMAs.
Nifty Pharma
Current Level: 22,220
Upside Potential: 9.8%
Support: 22,000; 21,650; 21,150
Resistance: ₹22,815
The Nifty Pharma index is likely to trade with a favourable bias as long as it holds above its 200-DMA, which stands around the 22,000-mark; below which support is seen at 21,650 and 21,150 levels. On the upside, the index is likely to test 22,815 levels. A close above this hurdle holds the key for further gains on the Nifty Pharma index. Post breakout, the index can potentially surge to 24,400 levels.
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Biocon
Current Price: ₹353
Upside Potential: 13.3%
Support: ₹348; ₹342; ₹332
Resistance: ₹373
Biocon stock can potentially rally towards the ₹400-mark from here on. Interim resistance for the stock can be anticipated around ₹373. The 200-DMA at ₹348 shall act as near-term support; while the short-term bias is likely to remain favourable as long as the stock holds above ₹342 and ₹332 levels.
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Cipla
Current Price: ₹1,520
Upside Potential: 6.3%
Downside Risk: 7%
Support: ₹1,512; ₹1,490; ₹1,475
Resistance: ₹1,540
Even as Cipla is seen trading above its 200-DMA, which stands at 1,512; the stock faces an overhead resistance at ₹1,540. Above which, upside for the stock seems capped around ₹1,615 levels for now.
On the other hand, failure to sustain above the 200-DMA, can see the stock slip back towards its 100-Week Moving Average, which stands at ₹1,414 levels. Interim support can be anticipated around ₹1,490 and ₹1,475 levels.
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Zydus Lifesciences
Current Price: ₹981
Upside Potential: 22.3%
Support: ₹967; ₹935
Resistance: ₹1,000; ₹1,050
Zydus Life stock is seen trading above its 200-DMA, which now stands at ₹967, for the third straight trading session. The bias at the counter is likely to be positive as long as the stock sustains above ₹935. On the upside, the stock faces immediate resistance around the ₹1,000-mark, above which it can spurt to ₹1,050 levels. The stock needs to break and trade above ₹1,050 for a meaningful rally to emerge, potential target of ₹1,200.
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Gland Pharma
Current Price: ₹1,677
Upside Potential: 7.5%
Downside Risk: 6.4%
Support: ₹1,653
Resistance: ₹1,715
Gland Pharma has rallied nearly 20 per cent in the last six weeks, and at present seen trading in an overbought territory on the daily scale. The stock needs to sustain above the 200-DMA, which stands at ₹1,653 for the bias to be favourable. Break and sustained trade below the same can trigger a corrective move towards ₹1,570 levels. On the other hand, the stock faces near resistance around its 100-WMA at ₹1,715; above which the stock can spurt to ₹1,802.
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