Nifty Pharma Index made a panic bottom (10353.9) last week followed by quick recovery but still year to date NIFTY PHARMA is down -8.7% year to date. Later Buyers started responding aggressively post the panic bottom. Pharma Heavy weights like Sunpharma, DR Reddy, Lupin lost -3.7%, -2.2% and -3.9% last week. However on the EOD sentiment NIFTY Pharma is holding positive for the last three consecutive days.
On the Daily timeframe Nifty Pharma has two gaps left unfaded so far. Gap Zones are at 11685 and at 12205.3 as shows in the above figure with dotted yellow lines. And the RRG Charts (Relative Rotational Graph) indicates currently Pharma sector is heavily under performing for a very long time and the relative momentum is dead there. It is time to look for a mean reversion in relative momentum and possibly the extreme sentiment in pharma stocks indicates a potential a bottom is made in the medium term.