Nifty Pharma Meets Near-Term Resistance

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After a 55% rally off its March lows, the Nifty Pharma Index has confirmed a failed breakout by closing back below resistance at its early 2019 highs of 9,500. As long as prices are below that level then we'd expect some near-term weakness in this hot sector. There's a large level of support down below near 8,350, so as long as prices are above that level then any pullback would be viewed as constructive digestion of the recent gainst. We're seeing a rotation out of areas like Pharma that have led the recent rally and into laggards like Financial Services which will push the major indices higher in the near-term. Overall, the Pharma sector remains one of the strongest areas of the market, but our expectation is for some profit-taking in the coming days and weeks.