Chartist Talks: Markets rebound imminent despite downward trajectory, says Milan Vaishnav

I would look at this in a slightly different way. The sentiment is ofcourse bearish; what we have witnessed over the past weeks is a painful mean-reversion of the markets. Nifty has currently closed a notch below the 200-DMA (Daily Moving Average) that currently stands at 23,574. I am keenly watching the 50-week MA (Moving Average) which is presently at 23,304. If this level is violated then the Nifty testing 23,000 cannot be ruled out. However, I feel that a percent here or there, the markets are staring at an imminent technical rebound even if the overall trajectory remains downward.

Will the Bank Nifty look better on charts compared to Nifty 50?

Yes, Bank Nifty is better on the charts. The reason is that this index is showing strong improvement in its relative momentum against the broader markets. It enjoys greater Relative Strength against both Nifty 50 index as well as the broader Nifty 500 index. Going ahead, it is likely to stay relatively stronger and relatively outperform the other indices.

Which are the two stocks looking strong on charts and technical indicators?

I will prefer to keep my eye on large-caps. HDFC Bank is very resilient; it enjoys strong Relative Strength against the broader markets. Any move above Rs 1,790 will lead to a strong multi-month breakout in the stock. It is expected to relatively outperform the broader markets.

Reliance Industries is the other stock that I am looking at from a short to medium term perspective. Although the stock has been on a decline and has been relatively underperforming, it has shown strong signs of potentially putting a base in place. It is likely to improve its relative performance going ahead from here.

Globally as well, I am expecting the energy space to stay resilient and relatively outperform the markets.

Are you bullish on Federal Bank?

Yes, Federal Bank is in a continued uptrend. It's on a rising trajectory forming higher tops and higher bottoms on the long-term charts. Any move above Rs 210 is likely take the stock meaningfully higher from current levels.

Your take on Mahindra and Mahindra?

M&M has been consolidating over the past few days; any close above Rs 3,000 has the potential to take the stock higher.

What is real significance of 200 DEMA? Does the maximum stocks above 200 DEMA mean the market is in bullish phase?

The 200-day Exponential Moving Average (DEMA) is a key long-term trend indicator used to gauge overall market sentiment. A majority of stocks trading above their 200 DEMA often signals bullish market conditions, reflecting broad strength. However, this should be confirmed with other indicators and market context to avoid false signals.

Are you big buyer in Indian Hotels?

On a personal note, no I am not. However, the stock is in a strong uptrend and one can certainly stay invested in this stock until the charts tell you otherwise.

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