Mayhem In Pharma Stocks

It's Just started, Much more correction to come.

“Major Pharma stocks is in Downtrend from last 1.5 years” That’s my wording towards people who asking for investment in Pharma stocks specially large cap like Dr Reddy, Lupin, Sunpharma, Glenmark.

Midcap Pharma is doing good in the space like Dishman , Jubilant, Natco pharma, cadila

I am not focusing on fundamental as numbers can be changed anytime but USFDA is major problem for pharma stocks, Any warning can lead to 10–15% down in a single day.

Now comes to technical part ( bit a long answer but surely help you in technical learning )

That’s the chart of Lupin of last 4 years ( Current market price Rs 1430/- 19 April 2017 )

Now Putting Technicals ( Bolinger Bands)and segregating Bull and Bear phase.

You can see in Bull phase Price remains above the middle line of Bolinger band, which is one kind of prediction that price will go up. That’ s a weekly chart and it carry very important value with it and if any candle closes below it that will show weakness or correction in price trend. ( that’ all my kind of doing investment although books don’t suggest that, books suggest that when price touch upper band sell that and when it touch lower band buy it, but i did changes some parameters of technical to get into right direction of share price).

In above All three rectangles, price came near to middle line but it didn’t closes below the that although it goes below in Intraday but on weekly chart it successfully closes above line, That’s describing good strength in Share price.

And now you will ask, when will the correction come in stock price. AS per my trading strategy when it closes below the middle line, correction will start but not immediately , gradually it will correct.

As the Candle stick closes below the middle line it shows weakness and correction in particular share price in coming future, and also it showing Pattern Double Top forming in weekly chart, which carries it’s own value in deciding share price. ( Double top means reversal in trend in share price )

And both Technical Indicator and Technical Patterns Indicating correction in price in near term and that happens, It went down from 2000 to 1400. ( From Nov 2015 to 19 April 2017).

And in the below chart as Candle stick closes below lower Band that indicate finally Bull phase is over and Bear will take charge of share price over next 14–20 months, and it will face selling pressure whenever it comes to middle band.

Now in below chart Bolinger Bands squeezes that’s describe a big move coming in the share price in coming months, and with Parabolic SAR it also describes movement will be of Downwards, but it will take time as it’s a weekly candle stick chart, so as per my strategy Rs 1000 is my target for next 8–12 months.

If you read about bolinger bands in books then you will be bit confused because here i apply my own strategy which is not written in books.

For More Information or any financial/Stock query you can visit my FB Page City Investment. Or you can whatsapp me on +91–9560915366. I am available 24*7