Trader's corner: Healthcare finally shows defensive strength, good bet to protect from volatility

Nifty Healthcare index is moving in a tight range of 1000 points, and technical indicators suggest a box breakout on daily charts for a target of 13500+ in the near term

At a time when there is heightened volatility in the market as investors are treading cautiously ahead of the poll results on June 4, healthcare as a sector comprising companies from the pharma, hospitals, diagnostic labs, and medical devices segment has emerged as a strong defence, according to independent investor and trader Praveen Kumar.

"As we move towards the electoral mandate, volatility spreads its wings across the board,” said Kumar. Incidentally, India VIX, the fear gauge, is currently trading around 21.50 levels.

“Although the market is trading near its all-time high, sentiments are fearful as everyone awaits the results of one of the biggest events in the country, directly impacting the market and economy. Q4 earnings have shown a mixed bag performance so far, with very few sectors posting good results overall. The healthcare sector is one such sector,” he added.

Nifty HealthCare index displays box breakout on the daily chart 

"Nifty HealthCare index is moving in a tight range of 1000 points & technical indicators are suggesting a box breakout on daily charts for a target of 13500+ in the near term, " Kumar said.

Kumar's Top picks: Lupin, Polymedicure, Windlas Biotech and Caplin Point

"In the largecap space Lupin is one such stock which is expected to do well in short term while in Mid & Smallcap Space some names like Poly Medicure, Windlas Biotech, Caplin Point where the management has guided good growth outlook and are expected to do well in the near term," he said.

Kumar shares his insights into the key supports and resistance levels for these stocks:

Caplin Point:

Consolidation in 1250-1600 range

Key support 1180-1250
Resistance 1550-1600

Above 1600 technical Targets are 1950/2000+

Windlas Biotech

Broken out above 590 and heading towards 690+ Key support 580-590.

Lupin

Consolidating in box range from last 4 months

1500 is a support while 1700 is a resistance

Above 1700 heading towards 2000+

Polymedicure

Broken above 400 points range after long

Technical Targets are 1950/2100+

Key support zone 1650-1700

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