Derivative patterns suggest 5-7% correction in pharma stocks: Ashish Chaturmohta

In a chat with ET Now, Ashish Chaturmohta, Head Technical & Derivatives Desk Research, Fortune Equity Brokers (India) Ltd, shares his view on pharmaceutical stocks.

ET Now: Please share with us your view on pharma names. What kind of levels would you envisage for Strides Arcolab, Wockhardt and other largecap pharma names, given the pressure that we have seen in the pharma space so far?

Ashish Chaturmohta: There is a huge amount of short built up on pharma counters. We may slowly see Strides Arcolab slipping below Rs 900 level.

Similarily, Wockhardt. may see levels around Rs 1,100-1,050.

Even if there is a pullback of say 3-4 per cent, it should be seen as an opportunity to exit long positions.

In case, if an investor is aggressively building up positions, then definitely he/she could look for any pullback in these stocks to the tune of 3-4 per cent, before making fresh shorts.

So overall, the trend looks quite weak. The kind of built up that these counters have, suggest that there can be another 5-7 per cent downside from current levels.