How to trade IT, Pharma stocks ahead of Aug 1 tariff deadline? Details here

Technical charts show that the Nifty IT index could decline another 11% from here; while the Pharma index could rally up to 8.5% if it clears the near-term hurdle at 22,815 levels.

Shares of Indian IT and Pharma companies are likely to be on investors’ radar as the deadline for the US reciprocal tariffs nears. Till date, the US administration has confirmed that there won't be any extension to the August 1 tariff deadline.  According to a Reuters report, Trump on Monday was quoted as saying that most trading partners that do not negotiate separate trade deals would soon face tariffs of 15 per cent to 20 per cent.  Meanwhile, India-US trade deal negotiations have hit another roadblock, as the US seeks India's commitment for an immediate elimination of Customs duties on most products. Earlier, talks between the two nations were stalled on opening up for the agriculture and dairy sectors to the US.  Market analysts believe that the flip-flops on the tariffs front and tax policies have triggered growing concerns in the US, making the outlook for IT stocks more cautious. READ MORE 

Against this background, here's a technical outlook on the Nifty IT and Nifty Pharma indices.

Nifty IT

Last Close: 35,370  Likely Target: 31,500  Downside Risk: 11%  Support: 34,230; 33,000  Resistance: 36,930  The Nifty IT index has declined 10 per cent thus far in July; and over 19 per cent so far in the year 2025. In comparison, the Nifty 50 index has gained 4.4 per cent; thus showing a major underperformance.   

 

  Technically, the IT index is seen trading with a negative bias on the daily chart as it quotes below the key moving averages. The short-term bias is likely to remain subdued as long as the index remains below 36,930 levels. This week, a close below 35,465 levels will signal a fresh breakdown on the weekly scale.  As such, the Nifty IT index could drop towards 31,500 levels, with interim support anticipated around its 200-Week Moving Average (200-WMA), which stands at 34,230 levels and the lower-end of the Bollinger Bands on the weekly scale around 33,000 levels.  ALSO READ | IT stocks brace for more pain post muted Q1 show; analysts share strategy 

Nifty Pharma

Last Close: 22,761  Likely Target: 24,700  Upside Potential: 8.5%  Support: 22,130; 21,960; 21,850  Resistance: 22,815; 23,050; 23,500; 23,900  The Nifty Pharma index chart is showing a favourable bias, with the index quoting firmly above its short-term moving averages and the formation of 'Golden Crossover' last week. Technically, the term 'Golden Crossover' means that the index 50-Day Moving Average (50-DMA) has now crossed above the 200-DMA; and has bullish implications.   

 

  The 50-DMA of the Nifty Pharma index now stands at 21,960, while the 200-DMA at 21,850. These moving averages along with the trend line support at 22,130 levels are likely to act as key support levels for the on-going positive trend.  The Pharma index, however, faces an overhead resistance around 22,815 levels on the weekly chart. The index needs to conquer this hurdle on a weekly closing basis, to signal further upside potential. As such, the Nifty Pharma index can potentially rally towards 24,700 levels. Intermediate resistance for the index can be anticipated around 23,050, 23,500 and 23,900 levels.