Nifty Pharma index breaks resistance, surges by more than 1 per cent

Although the benchmark indices are trading in red following a gap-down opening, Nifty Pharma index has been continuously surging and has gained more than 1 per cent during the morning session on Monday.  Most of the other sectoral indices are trading down barring FMCG and Realty, which are marginally up.

Cipla which holds 13.99 per cent weightage in the Nifty Pharma index surged as much as 3.8 per cent and drove the index up.  Cipla washed-off its nine-day losing streak, which included four days of consolidation.  Secondly, Lupin which holds 8.9 per cent in the index was the second top gainer with 1.8 per cent gains.  

Technically, the Nifty Pharma index had given a Symmetric Triangle breakdown at 9,135 on February 2, 2018.  The index yet again gave a breakdown after a pullback at 9,200 on February 16.  Thereafter the index fell with lower tops and lower bottoms up to 8,280 levels where it hit a Double bottom pattern on March 23 and 26.  With this, the index witnessed a gradual upbeat up to 8,841 levels.

Currently, the index was trailing near those levels and had consolidated for four days in a row. On Monday, the index broke out of its consolidation and also breached its major resistance at 8,841 levels with justifiable volumes.  The 14-period RSI hits above 55 indicating momentum going forward.  We may see some more upside in the sector in the upcoming sessions