Among the sectoral indices, the Nifty Pharma index (7,278.4) has been in the limelight over the past three weeks. Recently, the index breached a key short-term support at 7,550 levels and continued to decline. But after marking a multi-year low at 7,047 last week, it trades slightly above this level.

Since recording an all-time high at 14,020 in early 2015, the index has been on a long-term downtrend. Both medium as well as short-term trends are down. While trending down, the index had decisively breached a key support at around 10,650 in late 2016 and continued to trend down. Significant long-term support at 8,000 cushioned the index during early 2018.

After a corrective rally to 10,650, the index resumed the downtrend in September 2018. The key long-term support in the 7,550-8,000 band was breached. The daily as well as the weekly relative strength indices feature in the oversold territory, implying that a corrective up-move is possible. The index can witness a corrective rally and test resistance at 7,550 in the near term. A strong rally above this level can pave way for an up-move to 8,000. An emphatic break above 8,000 will alter the short-term downtrend and take the index up to 8,600 levels over the medium term. To alter the medium term downtrend, the index needs to break above 9,000. Subsequent resistances are at 9,500 and 10,000. Key supports below 7,050 are at 6,700 and then at 6,500 levels.

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