Pharma Stocks on the Move; This one is Gearing Up for a ‘Breakout’!

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The broader market index Nifty 50 is trading 0.55% lower at 17,000 by 12:29 PM IST, all thanks to weak sentiments prevailing in the global markets. Currently, there is only one sector that is holding its ground, delivering a gain to investors and that is the pharma sector. The Nifty Pharma index is trading 2.02% up at 13,236 while all other sectoral indices are trading with a cut.

One of the index constituents that is making some noise is Glenmark Pharmaceuticals Limited (NS: GLEN ) which is a INR 10,966 crores pharmaceutical company and holds roughly 1.28% weightage in the pharma index. The company is primarily engaged in the development of new chemical entities (NCEs) and new biological entities (NBEs).

Image Description: Daily chart of Glenmark Pharmaceuticals with volume bars at the bottom

Image Source: Investing.com

Today, the share price of Glenmark Pharmaceuticals surged 3.72% to INR 403.1, retracing a bit from the day’s high of INR 406.8 so far, which is the highest level since 17 August 2022. The stock has been consolidating in a range for more than 3 months as the pharma space was witnessing some demand at these lower levels which abated the fall which had been witnessed since July last year. 

This sideways trading range has an upper resistance of around INR 408 - INR 410, which is a strong supply zone. Many times, the stock had taken a U-turn from this level in the last three months, hence a rally with closing above this zone is crucial. On the other hand, the troughs during this period have kept on inching higher as buyers kept on placing their bets at higher levels, depicting their confidence in the bottoming out of the stock. This price action can be clearly seen via a rising trendline, joining these troughs. 

Once the stock closes above INR 410, it could be termed a classic ascending triangle breakout on the daily chart, which could further lead to a potential rally from there. On the upside, the stock could take a bit of halt near INR 420 which is the support-turned-resistance. Above this level, INR 440 would be a much stronger supply zone which would be a bit more difficult to clear. 

If the stock somehow decides to turn back from here, as it has done many times in the past, then a break below the rising trendline support could probably accelerate the downtrend. However, as the stock has made quite a robust base around the bottom, a highly bearish view should not be taken until it breaks INR 350. 

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  • Asutosh Mohapatro @Asutosh Mohapatro
    good job bro.proper price action.
    Like 0
  • AV CARE FOR YOUR MONEY @AV CARE FOR YOUR MONEY
    Do not follow the same pattern.
    Like 0
  • Girish Kandhari @Girish Kandhari
    Daily so big article, let us know quality if the writer of this article. 1/ Is he is a SEBI registered adviser .2/ is he is CFA or CA
    Like 2
    • Asutosh Mohapatro @Asutosh Mohapatro
      bro always follow your own rules before putting your money in something.BASIC RULE.
      Like 0
    • Asutosh Mohapatro @Asutosh Mohapatro
      bro always follow your own rules before putting your money in something.BASIC RULE.
      Like 0
    • Asutosh Mohapatro @Asutosh Mohapatro
      bro always follow your own rules before putting your money in something.BASIC RULE.
      Like 0
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