pharma stocks: Dharmesh Shah on 2 top stock recommendation from pharma sector


” Definitely, SBI for a long time, has seen a downfall today. But looking at the bigger picture for State Bank, I think there is a long way to go,” says Dharmesh Shah, Head-Technical, ICICI Direct.

The PSU pack which has been leading the Nifty lower, so how are you looking at the PSU banks right now after the sharp fall that we have seen in the last couple of days, anything that looks good to you?
Dharmesh Shah: Yes, definitely, PSU as a sector has been not in limelight for a long time. So, one should not forget that they have seen a fantastic rally for last six months.So, we believe for particularly PSU banks, we should look at the bigger picture. If you look at the long-term picture, it has been witnessing a decadal breakout. After post-decadal breakout, we are seeing more of a profit booking happening for most of these PSU counters.

I think in the short term they remain to be under pressure, no doubt about that. But we believe I think there is a long way to go for PSU banks. Definitely in the near-term there will be pressure, but yes, from the medium-term perspective one should definitely look for buying opportunity for most of these largecap stocks.

Definitely, SBI for a long time, has seen a downfall today. But looking at the bigger picture for State Bank, I think there is a long way to go.

So, in the near-term pressure, but yes, from the medium-term perspective, one should definitely look from the investment perspective.

Just wanted your take regarding SBI and SBI Card, both the stocks are in focus on account of news. What is the view on the charts?
Dharmesh Shah: SBI Card, again, I would say was not in limelight for a long time, was into a corrective phase and the stock seems to be witnessing a breakout from the falling channel, indicating the end of the corrective phase for SBI Card.

So, yes, definitely, in the near term, the stock has seen a good run up from 740. We can see some bit of a profit booking, but eventually I think SBI Card should be looked for target of around 850 to 860. Coming to SBI, again, for SBI, yes, the short-term support got breached today.

We can see some bit of a mild profit booking from the current levels, but 760, 770 remains to be the very strong support for SBI, which should hold, and we should see more of a base formation to consolidation in the near term for SBI.

Despite the weakness that we have seen in the overall market, pharma seems to be holding out. What is your view when it comes to the Nifty Pharma?
Dharmesh Shah: If you talk of pharma, I think most of the stocks have seen a good run up.
Going long at the current levels for stocks like Lupin. I think so we should look more of stock specific in pharma. Coming to pharma, we remain to be positive for Natco Pharma. Again, for Natco Pharma, the stock is forming a weekly higher top, higher bottom formation and compared to others I think the stock if you look at the bigger picture, a long consolidation breakout, multi-year consolidation breakout has been witnessed in Natco Pharma.
So, we remain to be positive for Natco Pharma, for target of around 1660 to 1670 in the near term.

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