"As long as the 100-week moving average (22,146) stays defended, the bulk of the pain might be over with just some more left for the Nifty," said Milan Vaishnav, the founder of Gemstone Equity Research & Advisory Services in an interview to Moneycontrol.
According to him, the Nifty FMCG is expected to defend March lows and relatively outperform the broader markets.
He is positive on One 97 Communications (Paytm) and ITC. "Paytm is forming a larger bullish formation on the higher time frame charts, while ITC is likely to put up a good show going ahead as indicated by emerging Relative Strength on this counter," said Milan who spent nearly two decades in the capital markets.
Will the fall be restricted to the June lows, or will it extend deeper toward the 20,500-20,000 zone?
Going by the classical method, what is immensely important as of now is that while Nifty formed a fresh intraday low of 21,743 (low of 2025) which is lower than its previous swing low of 21,964, it has managed to defend the all important 100-week moving average which stands at 22,146 by closing a notch above it.
The week is yet to complete and it would be crucially important for the Nifty to defend this level; the index's price action vis-a-vis this level will be important to watch. So long as this stays defended, the bulk of the pain might be over with just some more left.
What is the significance of Monday's chart pattern, created after a big gap down? Do you see the possibility of a sharp rebound?
The open and low were the same; this creates a bullish Belt Hold candle. The myopic interpretation of this would be that so long as the low point of this bar stays defended, the index may either show a technical rebound or at least consolidate. Only a violation of the day's low point could invite incremental weakness.
Will the Bank Nifty break the 48,200 mark (the low of the weekly candle from March 17-21), or will it defend Monday's low in the upcoming sessions?
Unlikely. The 48,000-48,200 zone is a major support area for the Nifty Bank index. That coincides with the 100-week MA of this index as well which is currently at 48,100. I expect this zone to stay defended in the upcoming sessions.
Which two stocks look attractive for buying after analyzing the charts?
I would stay defensive here and more stock-specific as well.
One 97 Communications (Paytm)
I will continue to stay positive on this stock. This stock is forming a larger bullish formation on the higher time frame charts. Give the readings from the lead indicators, this is likely to show strong resilience and may relatively outperform the broader markets.
Another stock I am looking at is ITC. This is a defensive play. The stock is consolidating following the recent decline and relative underperformance. It is likely to put up a good show going ahead from here going as indicated by emerging Relative Strength on this counter.
Will the Nifty IT break the 30,000 mark this week, considering the weakening sentiment?
The Nifty IT Index has formed a large multi-month classical double bottom support at 31,466. So long as 31,000-31,466 zone stays defended it is unlikely that it will break 30,000 level.
Considering the recovery from the day's low, do you believe the Nifty FMCG will defend the March lows?
Yes, I expect it to defend March lows and relatively outperform the broader markets.
Do you expect the Nifty Midcap 100 index to defend the March low, considering it rebounded significantly from there today? Additionally, do you expect the Nifty Smallcap 100 index to defend today's low, as it coincides with the horizontal support trendline on the weekly charts?
It would be difficult to be cent percent sure; however, from a technical standpoint, both these indices are likely to defend the March lows. While both of these indices are inside the lagging quadrant of the Relative Rotation Graph (RRG) when benchmarked against the Nifty 500 index, they are showing good improvement in their Relative Momentum against the broader markets.
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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