Pharma Index looking good in the long run. Nifty Pharma IndexNSE_DLY:CNXPHARMAHappy_Candles_InvestmentNifty Pharma Index seems to be breaking out on the Weekly chart. It has formed a head and shoulder kind of structure in addition to this it seems to be on the verge of a trend line breakout. RSI index also seems to be becoming bullish. Currently Pharma index closed the week at 22821. A closing in this index above 22829 can take it forward towards next resistances which are at 23076 and 23561. A weekly closing above 23561 will make the index more Bullish and can send it into frenzy towards 23810 or eve 24193 or higher. Support for Pharma index currently is near 22200, 21712 (Mother line support) and 21385. Shadow of the candle is turning more positive. When the index is strong and gives a breakout it means that the undercurrent in majority of the companies which constitute the index is strong. There will be some companies which will obviously drag the index down as there cannot be one-way traffic. To know amongst these which companies to invest in an investor should look at fundamentals of the company, recent and past results, cash flows, Sales and order books, EPS and many other factors. While a Technical investor should look at charts of the companies before investing. Nifty Pharma index consists of 20 companies. The companies that constitute this index are Abbott, Ajanta Pharma, Alkem, Aurobindo Pharma, Biocon, Cipla, Divi’s Lab, Dr Reddy, Gland Pharma Glenmark Pharma, IPCA Labs, JB Chem Pharma, Laurus Labs, Lupin, Mankind Pharma, Piramal Pharma, Sun Pharma, Torrent Pharma, Wockhardt and Zydus Life Sciences. Amongst these companies look for strong performers within this index who have given a good result this quarter and have strong EPS growth and good order books as well as trailing PE ratio less than 10 years Average PE ratio. This would result in you finding out the companies which are undervalued and have good growth potential. Capital Goods are essential for a country to grow. A strong GDP will mostly mean strong performance by some these companies. A smart investor would be a person who looks at both fundamentals and technicals of the company and invests in a fundamentally strong company which is giving a technical breakout. For this one has to learn Techno-Funda analysis. I have written a book on the subject called The Happy Candles Way To Wealth Creation. In this book you will learn the basics of Techno-Funda investing. The book is available on Amazon and is one of the highest rated books in its category. With an approval rating of 4.8/5 as on date. Lot of investors call it as a Hand book for Techno Funda investing. Most of the chapters are standalone and can be read at your own accord. It will be really helpful to you. To know more about Mother line, Father line and my Mother, Father and Small child theory, Parallel Channel you should once again I recommend, read my book the Happy Candles Way to Wealth Creation. Disclaimer: The above information is provided for educational purpose, analysis and paper trading only. Please don't treat this as a buy or sell recommendation for the stock or index. The Techno-Funda analysis is based on data that is more than 3 months old. Supports and Resistances are determined by historic past peaks and Valley in the chart. Many other indicators and patterns like EMA, RSI, MACD, Volumes, Fibonacci, parallel channel etc. use historic data which is 3 months or older cyclical points. There is no guarantee they will work in future as markets are highly volatile and swings in prices are also due to macro and micro factors based on actions taken by the company as well as region and global events. Equity investment is subject to risks. I or my clients or family members might have positions in the stocks that we mention in our educational posts. We will not be responsible for any Profit or loss that may occur due to any financial decision taken based on any data provided in this message. Do consult your investment advisor before taking any financial decisions. Stop losses should be an important part of any investment in equity.