Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas, emphasised the significance of the April low at 21,777. According to him, a breach of this level would signify a break in the higher top and higher bottom formation, indicating a potential trend reversal for the Nifty 50. He anticipates a target range of 21,400 – 21,280, coinciding with the 38.2 percent Fibonacci retracement level, if this breach occurs.
Furthermore, Gedia noted that FMCG and IT sector stocks are currently rebounding from their long-term support levels represented by their respective 200-day moving averages. Leveraging his extensive 10+ years of experience in the financial services industry and technical research expertise, he recommended considering investments in TCS and Dabur India.
Do you expect Nifty to break April lows soon? If yes, then 21,500 would be level to watch?
The Nifty has corrected ~850 points in the last five trading sessions. The index has now reached the lower end (21,950 – 21,900) of the rising channel within which it has been trading since January 2024. The Nifty has reached a make-or-break level considering it has been holding on for the last hour months.
The April low is 21,777, which if breached, shall violate the higher top and higher bottom formation and result in a trend reversal. Below April lows we can expect 21,400 – 21,280 which coincides with the 38.2 percent Fibonacci retracement level of the rise from 18,838 – 22,795 and the weekly lower Bollinger band.
What is your F&O strategy for Bank Nifty next week?
Bank Nifty has been witnessing a sharp decline from 50,000 levels. It is approaching the 20-week average support of 47,244. So, the risk reward is not favourable to go short at current levels.
Ideally, we shall look for signs of strength around the support zone and trade for the pullback. The ideal strategy would be to deploy a Bull Call Spread or a plain Vanilla Long Call to trade this pullback, but confirmation is needed first.
Do you expect Bank Nifty to break higher highs, higher lows formation?
The 46,580 level if breached on the downside shall lead to a violation of the higher top and higher bottom formation. However, before that there are multiple supports at 47,240 – 47,160 in the form of the 20-week moving average and the lower end of the rising channel is placed. So, we expect the Bank Nifty to hold on to the support zone and not break the higher top higher bottom formation.
Are you bullish on Vijaya Diagnostics?
Vijaya Diagonstic Centre has been in an uptrend and the recent correction towards Rs 660 levels was bought into. The weekly momentum indicator is having a bullish crossover which is a buy signal. The uptrend is intact.
Based on these parameters, we shall continue to maintain a bullish stance on stock for targets of Rs 830 – 850 from short-term perspective.
Do you expect auto stocks to continue to rally?
Nifty Auto has been the outperforming sector during this correction. It touched an all-time high of 22,995 in today’s trading session. The core heavyweight stocks of the index are in an uptrend and we see no signs of trend reversal as of now.
There can be some amount of consolidation after the sharp run-up but the uptrend is intact and can outperform going ahead as well.
Your top 2 bets in the falling market?
FMCG and IT sector stocks are bouncing from long-term support of their respective 200-day moving averages.
Dabur from the FMCG sector can be bought with a stop-loss of Rs 525 for targets of Rs 578 – 596. TCS from the IT sector appears to be taking the lead in the process of pullback. So, it can be bought with a stop-loss of Rs 3,840 for the target of Rs 4,120 – 4,150.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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