Ashish Kyal of Waves Strategy Advisors suggests buying Jagsonpal Pharma and Infosys for the medium term. "Jagsonpal Pharma prices have already given a breakout of the Rounding Bottom and currently retesting the neckline area, while Infosys gave a breakout of an Inverted Head and Shoulders pattern suggesting fresh course of buying in the stock," he said in an interview to Moneycontrol.
He is bullish on the IT sector as a whole, hence TCS is bullish over short to medium term.
According to Kyal, ITC prices can consolidate between Rs 485 and Rs 460 levels over near term. "I will avoid ITC for now and wait for consolidation before going longs," said the founder and CEO of Waves Strategy Advisors, with more than couple of decades of experience in capital markets.
Do you think technically the US markets will start a new bull run now?
US equity market has been in a bull trend since many years now. The low made on Dow Jones Industrial Average - the major US index - in the year 2020 was at 18,213 and the index is now trading at 44,300 levels. This is an up move of more than 140 percent in just over 4 years of time. US markets are cheering with Donald Trump's return to power and trading at lifetime highs already. Overall positive trend will remain intact unless the index starts forming lower highs and lower lows formation. On downside, the break below 41,700 will be first sign of reversal and as long as same is protected ongoing bull trend in US markets will continue.
Is there more steam left in the US Dollar index?
Dollar index measures the strength of US Dollar against basket of currencies. We can see sharp rise in US dollar over past 8 weeks. Low formed in this index was at 100.15 in September and now the index is trading at 107.50 levels. This is a rise of more than 7 percent in just a few weeks which is strong appreciation in US dollar. It also indicates that money is flowing back to the US as a safe haven. US Dollar also has inverse correlation to that of commodities and if the rally in Dollar index continues we can see pressure building on commodities sector, including crude oil and copper. This index is now at crucial juncture and breach above 108.50 will resume the up move to 110 levels. On downside, only a breach below 105.50 will indicate any reversal.
The Nifty recorded a jump of over 2 percent on Friday. Is this just a short-covering led rally, or is it the beginning of a new leg of the upmove?
During our interview in October 2024, we have cited the breakdown from the neckline of topping Head & Shoulder pattern along with Elliott wave when Nifty was trading near 24,700 level. Prior interviews on Moneycontrol can be referred for the same. The target at that point of time was given as 23,300 on downside. The index made a low of 23,263 on November 21 precisely as expected and reversed from there. Also after 9 trading sessions index managed to close back above prior day’s high thereby indicating a positive reversal. This can be start of retracement of the entire fall which happened from the top till the lows. We can expect a move back to 24,450 on upside over short term with 23,420 as an important short term support.
Where would you bet on for the longer term?
Jagsonpal Pharma ended a week on a positive note, rising 19.5 percent, and surged by 7.6 percent on Friday. As a result, prices produced a strong bullish candle on the weekly chart. Prices have already given a breakout of the Rounding Bottom and currently retesting the neckline area. A break above Rs 655 can result into fresh rally in this stock. Hence, the trend for Jagsonpal Pharma is bullish. For further bullish momentum to continue we need decisive breakout above Rs 655 level for move to Rs 700 level as long as Rs 629 remains intact.
As IT was the top performing sector in Nifty in the previous session, Infosys gained 3.72 percent. Prices gave a breakout of an Inverted Head and Shoulders pattern suggesting fresh course of buying in the stock. Currently, prices are trading near the upper end of the Keltner channel, a break above it can suggest positive momentum to continue. As per the wave perspective, primary wave (ii) got completed on the downside and next leg has started to unfold on the upside in form of wave (iii) which is considered as a strongest one as per guidelines. Hence, the current trend for Infosys looks bullish for move to Rs 2,050 levels or higher as long as Rs 1,845 remains intact on downside.
Is the worst over for the Nifty FMCG index? If yes, are you a buyer in the FMCG space?
Nifty FMCG sector showed a decline of more than 16 percent since the high of 66,000 made in September 2024. Prices have now reached to an important price action support area near 56,000 levels. We can expect short term consolidation or accumulation at these levels. So, one can adopt buying in staggered fashion in FMCG stocks as we can expect short to medium term positive reversal for move back to 59,000 levels on upside.
Are you a buyer in ITC, and TCS now?
We are bullish on IT sector as a whole and already mentioned rationale and positive outlook for Infosys above. Both TCS and Infosys is bullish over short to medium term.
For ITC, we need to see bottoming pattern and consolidation before any meaningful rally on upside. Prices can consolidate between Rs 485 and Rs 460 levels over near term. I will avoid ITC for now and wait for consolidation before going longs.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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