Chartist Talks | CDSL to surpass all-time high soon as chart structure looks extremely bullish

On the daily charts, the Nifty has confirmed higher tops and higher bottoms, which signal reversal in the short-term bullish trend. Bank Nifty has also managed to close above its 200-day EMA (exponential moving average). On October 19, Bank Nifty fell below the crucial trendline support of 43,800 and then went on to hit a low of 42,105 on October 26.

As per the change of polarity rule, previous support level of 43,800 is now expected to act as a resistance for the Bank Nifty in the near term. The 50-day EMA for Bank Nifty is placed at the 44,000-odd levels and as it is downward sloping, it is expected to coincide with the trend level of 43,800 in the coming days. Therefore, we can say that there is strong hurdle in the 43,800-44,000 zone.

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So, to answer this question, yes, Bank Nifty is expected to hit the zone of 43,700-44,000 next week. However, we need to see whether resistance of 44,000 is being taken out or not on a closing basis because on the medium-term time frame still the structure of the chart is more on the bearish side with lower tops and lower bottoms. Recent rise in the index looks more like a pullback rally.

Will 19,500-19,600 be a crucial hurdle for the Nifty50 on the higher side? Will the index be able to stay above these levels next week?

Long build-up was seen in the Nifty Futures during the last week, where we have seen 7.5 percent rise in Open Interest with Nifty breaking the two-week losing streak by rising 0.96 percent. The Nifty Open Interest Put call ratio remained unchanged at 0.96 during the last week. Among the Nifty weekly Options (November 9), Put writing was seen at 19,000-19,200 levels. Therefore, on the downside, the 19,000-19,200 zone is likely to act as a strong support for the coming weeks.

On the other hand, the Nifty is likely to find an immediate resistance in the vicinity of 19,400-19,500 levels where Calls have been written.

Long build-up was seen by FIIs in the Nifty Futures segment during the last week, where they net bought Rs 610 crore worth of Open Interest going up by 26,069 contracts. On the other hand, they have created fresh shorts in the Bank Nifty futures where they have net sold worth Rs 968 crore with their Open interest going up by 22,689 contracts.

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The 50-day EMA for the Nifty is placed at the 19,450 levels and the same can also offer resistance in the short term. Positional charts indicate an overall bearish structure for the Nifty with lower top and lower bottom formation and, therefore, it looks difficult for the Nifty to sustain above the 19,500-19,600 mark next week. It would be advisable to lighten the long commitments in the resistance zone of 19,500-19,600.

Will the Nifty FMCG index see a breakout above 54,000 in November?

For the last three consecutive months, the Nifty FMCG index has been consolidating in the narrow range of 51,000-52,800. The index is hovering near its 50-day EMA for the last three months (51,735). A breakout above 52,800 would confirm the breakout from the consolidation and unless that happens, we can expect the existing trend of consolidation to continue.

If we were to compare the FMCG index chart setup with the Nifty and Bank NIfty chart setup, FMCG Index looks much stronger relatively. We expect FMCG sector to outperform the benchmark indices in the near term.

Your two phataka bets for Diwali 2023...

Indian Oil Corporation, and Equitas Small Finance Bank.

Do you expect Vodafone Idea to climb above previous swing high seen in 2021?

This is the eighth consecutive month of rise in the stock. Vodafone Idea has registered a rally of 147 percent from Rs 5.8 to Rs 14.35 in this period. The stock has recently surpassed the crucial resistance of Rs 12.50 and has sustained above that.

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Previous swing high made in 2021 is placed at Rs 16.80. Looking at the chart structure, there is a higher probability of surpassing the swing high resistance of Rs 16.80. Existing long positions can be held with Rs 12 stop-loss.

Do you think Petronet LNG is done with the correction?

Petronet LNG has been in a long-term consolidation phase since September 2019. Lower band of the consolidation is placed at Rs 180-odd levels, which can act a strong support for the stock in the medium term.

The stock has witnessed more than 23 percent correction from the recent swing high of Rs 254. After this sharp cut, it reached the oversold territory. There has been many swing lows between Rs 180 and Rs 190, which can act as a support in the current fall for the Petronet LNG.

Is CDSL marching towards its all-time high first, before getting into major corrective mode?

Last week, the stock registered a fresh all-time high on a weekly closing basis. The stock is in a bullish momentum phase and it is expected that it will surpass the previous all-time high of Rs 1,688 in the coming days. Chart structure is extremely bullish and we don’t expect major correction in the stock in the near term.

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