“We are witnessing some sort of profit booking in the metal sector as a whole. But one should definitely wait for some more correction,” says Nilesh Jain, AVP-Derivative & Technical Research, Centrum Broking. Do you think that the technicals are in place for the rally in the steel counter to continue?After eight consecutive sessions of gain, we are witnessing some sort of profit booking in the metal sector as a whole. But one should definitely wait for some more correction because of the strong momentum that we have seen in the past couple of weeks. It indicates that a healthy correction is very much due. Going forward, on a broader scale, Steel Authority, Tata Steel and JSPL are the three preferred picks from the metals segment. Those are looking very positive. If you look at the target for Steel Authority, we can expect levels of Rs 105 and Rs 110 going forward. In about a month’s time, we can expect these targets to be reached. Tata Steel has hit all-time highs and also provided a major multi-year breakout. The target for Tata Steel is now coming to Rs 950-980, whereas the immediate support has shifted higher towards Rs 840. One should definitely wait for some more correction in the range of Rs 880-870. That would be the ideal range to initiate a fresh long position in Tata Steel. Overall, yes we continue to remain positive in the metals sector for a short to medium term perspective. What are the other trading recommendations?As you can see in today’s trading session, pharma is outperforming and we have seen a little bit of traction in the IT space. The focus should shift towards the defensives and the stock that we like from the pharma space is Dr Reddy’s where it has surpassed the 200-day long term moving average. Now the counter is hovering near its 50-day moving average. Going forward, we can expect further momentum to continue in Dr Reddy’s towards Rs 4,880-4,900. The other stock that we like is from the IT space. It is Wipro. We saw a fresh breakout a couple of days back from the Rs 440 range. That was a downward looking trend line breakout in Wipro. For Wipro, one can go long at the current level with a stop loss of Rs 440 for an upside target of Rs 460. I just want to reiterate that the pharma sector is also looking positive. We saw a falling channel breakout in the pharma sector. We can expect levels of 13,200-13,500 on the Nifty pharma index.