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Nifty Pharma Index on the Verge of Breakout; This Pharma Stock Near Multi-Year High!

24 May 20244 mins read by Angel One
The Nifty Pharma index nears a breakout. Lupin, up 52% in Q1 FY24 net profit, hits a 52-week high, breaking a 69-day consolidation. A move above the level of Rs 1720 is positive.
Nifty Pharma Index on the Verge of Breakout; This Pharma Stock Near Multi-Year High!
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Nifty Pharma Index Performance

On Wednesday, the Nifty Pharma index, which captures the performance of the pharmaceutical sector and comprises 20 companies listed on the National Stock Exchange of India (NSE), recorded a fresh all-time high. The index is up by 14% on a year-to-date basis and is technically on the verge of breaking out of a two-month-long consolidation pattern (rectangle pattern). Once the index sustains above the 19,400 level, the breakout shall be confirmed. Meanwhile, the daily 14-period RSI has moved above the 60 level and is in a rising trajectory, which is positive for the index.

Lupin: A Promising Stock in the Nifty Pharma Index

One of the promising stocks from the Nifty Pharma index exhibiting a similar breakout pattern is Lupin. Lupin has a weightage of 6.11% in the Nifty Pharma index and reported a 52% jump in its net profit for the January-March quarter of FY24. Let’s delve into Lupin’s technical perspective and why it should be on your radar.

Technical View of Lupin

The share price of Lupin hit a fresh 52-week high on Wednesday, ending higher by about 2%. On the daily time frame, Lupin has broken out of a 69-day consolidation with higher volume. It closed at a multi-year high, clearing the parallel resistance for the first time since 2016. The stock is trading above all long-term averages and is 5.68% above the 50-day moving average (DMA). Bollinger Bands have begun to expand after a long contraction, and the MACD shows increased bullish momentum. The RSI has shifted its range into the bullish zone, and the Elder Impulse System indicates strong bullish momentum. Additionally, the KST and Stochastic RSI are both in a bullish setup. In summary, Lupin has broken out of a long consolidation. A move above Rs. 1720 is positive, with potential to test Rs. 1780. Maintain a stop loss at Rs. 1685.

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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