Pharma Stocks Outlook: Range-bound next week tracking

[suguhopes]

MUMBAI - Shares of pharmaceutical companies will continue to remain
range-bound, tracking a likely weak broad market, next week.

This week, shares of drug companies traded in a narrow band, with
Bombay Stock Exchange Healthcare index almost flat, gaining only 0.2%,
and this trend is set to continue next week.

The benchmark share indices--Bombay Stock Exchange's 30-share Sensex
and National Stock Exchange's 50-share Nifty were also up only
marginally at 0.1% and 0.8%, respectively.

Cipla and Dr. Reddy's Laboratories will continue to attract attention
ahead of their Apr-Jun earnings on Jul 18 and Jul 21, respectively.

Both companies are expected to see sideways movement on the technical
charts next week.

Cipla will find support at 206 rupees and face resistance at 225
rupees, while Dr. Reddy's has support at 628 rupees and resistance at
689 rupees.

GlaxoSmithKline Pharmaceuticals, which is seen as a defensive bet amid
a weak broad market, is seen developing a weak pattern on the charts.

Support for GSK Pharma is seen at 1,070 rupees.

Among the other frontline shares, Ranbaxy has support at 500 rupees
and resistance at 560 rupees, while support for Sun Pharmaceutical is
at 1,264 rupees and it will face resistance at 1,425 rupees.

Both Ranbaxy and Sun Pharma are moving in a narrow range next week.

Among the mid-cap shares, Lupin and Glenmark are likely to see buying
next week.

Lupin has breached a crucial level of 700 rupees this week and now,
resistance for the shares are seen at 750 rupees next week.

Glenmark Pharmaceuticals shares will also be in focus, but the upside
is seen capped.

Closing prices, in rupees, of leading pharmaceutical shares, on NSE
today, compared with a week ago:

Company Jul 11 Jul 4 %
Change

Cadila Healthcare 314.00
312.65 0.4
Cipla 210.50
208.10 1.1
Dr Reddy's Laboratories 648.50
645.15 0.5
GlaxoSmithKline Pharmaceuticals 1,114.55 1,138.70
(-) 2.1
Pfizer 567.10
555.30 2.1
Ranbaxy Laboratories 532.15 538.40
(-) 1.2
Sun Pharmaceutical Industries 1,317.05 1,323.10
(-) 0.5

BSE Healthcare Index 4129.94
4123.29 0.2
Nifty 4049.00
4016.00 0.8
Sensex 13469.85
13454.00 0.1


N.Sukumar
Research Analyst