The Nifty50 gained over 10% year to date vs Nifty Pharma delivered -2.36%, due to global uncertainty around U.S. tariff conditions. During this correction phase, sector rotation was evident: Pharma and IT faced selling pressure, while Auto and Banking saw outperformance. Now, momentum is likely shifting back toward IT and Pharma. Two stocks are standing out based on their price actions, offering favourable risk-reward setups for traders and investors.
Aurobindo Pharma: Bullish Reversal Breakout
Aurobindo Pharma (Auropharma) began its rally in early 2023 from ₹390, delivering 298% returns in two years and hitting an all-time high of ₹1580.
From August 2024 to April 2025, the stock corrected by 36%, moving within a falling channel. Recently, the stock has given a breakout from a bullish reversal pattern, i.e. descending triangle, rounding bottom. The price is trading above key resistance levels and its long term 200-day moving average, while the RSI remains above 60, suggesting bullish momentum. These factors suggest Auropharma could start its fresh upward trend in the next calendar year 2026.
Auropharma – Potential Signs of Bullish Continue Pattern
- Bullish multiple patterns: The stocks have given a breakout from multiple bullish patterns, i.e. descending triangle and rounding bottom.
- 200-Day Moving Average: The stock price is trading above its long term 200DMA after November 2024, which is considered a fresh uptrend.
- Breakout with Volume: At the current chart setup, the price is rising with a rise in volume, which indicates bullish sentiment.
- RSI & Price Direction: The 14-period RSI is above 60, showing that the stock is in strong bullish momentum.
Lupin: Bullish Reversal Breakout
Lupin rallied from ₹630 to ₹2400 between March 2023 and January 2025 before entering a consolidation phase, correcting about 26%. At the current juncture, the stock has broken out from a bullish reversal pattern, a descending triangle.
The price is trading and sustaining above the long-term 200-day moving average, and the RSI remains in the bullish zone above 60, which is in favour of bullish momentum. These factors signal that Lupin could start its fresh upward trend in the next calendar year 2026.
Lupin’s Stock Reversal Analysis
- Descending triangle breakouts: The price is now trading at and keeping above its breakout from the bullish reversal descending pattern.
- Volume Surge Confirming the Breakout: The fall in price coincides with the fall in volume, and the rise in price has been accompanied by the rise in volume, which indicates strong investor interest.
- 200 Day Moving Average: The stock price is trading over its 200 DMA. That means the stock is on an upward trend.
- RSI & Price Direction: The 14-period RSI is above the 60 zone and showing that the stock is in strong bullish momentum.
Final Take
Post-GDP number announcement, the Indian market remains fundamentally and technically strong compared to global peers. When indices trade near all-time highs, sector selection becomes critical. Here we are observing the sectors which did not participate earlier, now preparing for a fresh rally. The Nifty Pharma is a sector where investors and traders must look, and within pharma, Auropharma and Lupin exhibit strong technical setups, supported by breakouts, bullish RSI readings, and rising volumes. Both counters deserve a place on your watchlist for potential gains for the next calendar year.
Disclaimer:
Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Kiran Jani has over 15 years of experience as a trader and technical analyst in India’s financial markets. He is a well-known face on the business channels as Market Experts and has worked with Asit C Mehta, Kotak Commodities, and Axis Securities. Presently, he is Head of the Technical and Derivative Research Desk at Jainam Broking Limited.
Disclosure: The writer and his dependents do not hold the stocks discussed here. However, clients of Jainam Broking Limited may or may not own these securities.
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