Trading strategies in pharma stocks amid US tariffs flip-flop.
The NSE Nifty Pharma index surged over 1 per cent in intra-day deals on Thursday amid reports that the Donald Trump administration may not impose tariffs on generic medicines.
According to a report from the US-based Wall Street Journal, the Trump administration said it isn’t planning to impose tariffs on generic drugs imported from foreign countries. Reportedly, India accounts for around 40 – 50 per cent of the generic medicines imported in the US. Thus far, even the 100 per cent US tariff on branded drugs which was to be implemented from October 1, has been delayed with reports indicating that the Trump officials have given time for negotiations with pharma companies. Back to the market, Lupin, Aurobindo Pharma and Granules India were the top movers – up 4 per cent each as of 10 AM. While, the NSE Nifty quoted flat around 25,050 levels. READ MORE Given this background, here’s a technical outlook on the top pharma stocks.
Dr. Reddy’s Labs Current Price: ₹1,260
Likely Target: ₹1,370 / ₹1,151 Upside Potential: 8.7% Downside Risk: 8.7% Support: ₹1,230 Resistance: ₹1,300 Dr. Reddy’s Labs is seen testing support around its 200-Day Moving Average (200-DMA), which also coincides with the 100-Week Moving Average (100-WMA) around ₹1,230 levels.
The bias at the counter is likely to be cautiously optimistic as long as this support is held; below which the major support stands at ₹1,151. On the upside, the stock can potentially spurt to ₹1,370 levels, with interim resistance visible at ₹1,300.
Sun Pharma Current Price: ₹1,642
Likely Target: ₹1,400 Downside Risk: 14.7% Support: ₹1,622; ₹1,552 Resistance: ₹1,650; ₹1,668; ₹1,693 Sun Pharma stock has been trading below its 200-DMA since the breakdown on May 9. The 200-DMA hurdle stands at ₹1,693, with near resistance seen at ₹1,650 and ₹1,668 levels.
On the downside, the stock has near support at ₹1,622, below which the key short-term support stands at ₹1,552 levels. Break and sustained trade below the same can trigger a slide towards ₹1,400 levels.
Lupin Current Price: ₹1,976
Likely Target: ₹1,600 Downside Risk: 19% Support: ₹1,854; ₹1,785 Resistance: ₹2,007; ₹2,048 Lupin is likely to trade with a tepid bias as long as the stock quotes below ₹2,048, with interim resistance likely around its 200-DMA at ₹2,007 levels. On the downside, the support for the stock stands ₹1,854 levels in the form of the 100-WMA – a key moving average the stock has held above since May 2023.
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Break and sustained trade below the 100-WMA, can trigger a sharp fall towards ₹1,600 levels, cautions the long-term chart, with interim support seen around ₹1,785.
Cipla Current Price: ₹1,511
Likely Target: ₹1,700 / ₹1,300 Upside Potential: 12.5% Downside Risk: 14% Support: ₹1,488; ₹1,459 Resistance: ₹1,575; ₹1,600 Cipla is seen testing the 200-DMA which stands at ₹1,488; below which the 100-WMA at ₹1,459 is likely to act as a key support for the stock. Cipla has been trading above the 100-WMA since June 2023.
On the upside, the stock faces resistance at ₹1,575 and ₹1,600 levels; break of the same can trigger an up move towards ₹1,700 levels. On the flip side, break of the support zone, can trigger a fall towards ₹1,300 levels, hints the weekly chart.
Granules India Current Price: ₹568
Likely Target: ₹670 Upside Potential: 18% Support: ₹538; ₹511 Resistance: ₹605; ₹640 Granules India looks favourably placed on the charts across time-frames. The near-term bias is likely to remain upbeat as long as the stock trades above its 20-DMA, which stands at ₹538; below which the trend line support exists at ₹511.
On the upside, the stock can potentially surge towards ₹670 levels, with some resistance expected around ₹605 and ₹640 levels.
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