Milan Vaishnav, Founder of Gemstone Equity Research & Advisory Services, expects the Nifty to hold steady around the 21,900-22,000 range, which aligns with the 100-week moving average. On the upside, he anticipates the index may pause around the 23,000-23,150 zone.
According to Vaishnav, the IT Index is in a bottoming-out phase. "It is also shown improving its Relative Momentum when plotted on the Relative Rotation Graph (RRG) and benchmarked against the broader Nifty 500 index," he said.
Vaishnav is bullish on Prestige Estates Projects and Paytm. "Prestige Estates has seen an emergence of a bullish divergence of the RSI (Relative Strength Index) against the price, while Paytm is forming a large bullish formation on the higher timeframe chart and has potential to return good gains over the coming months," he noted.
With nearly two decades of experience in capital markets, Vaishnav’s insights highlight key trends and opportunities in the current market landscape.
What are the Nifty levels to watch, as the index has given a strong consolidation breakout, especially after the FOMC event?
FOMC is a non-event. Having said this, Nifty has rebounded off the 21,900-22,000 zone which is the 100-week MA (moving average). In the immediate future, I expect this levels to hold. On the upside, I expect Nifty to take a breather in the 23,000-23,150 zone. These is the zone where the index will run into strong resistance levels. Even going by the Options data, there is very negligible Put open interest above 23,000 strike and this strike also holds maximum Call open interest for this months expiry.
What should be the market strategy post-Federal Reserve interest rate decision?
The strategy will be simple and that will be staying highly selective and stock-specific. Rather than chasing the stocks that have run up too hard, it would be imperative to focus on the stocks that have strong and attractive technical setups and at least improving Relative Strength. The key would be to stay sector-neutral and stock-specific in the approach.
Do you strongly believe that the market has bottomed out now?
I would view this in the global context. While the S&P 500 Index has not yet comprehensively violated the 50-week MA yet, we have done that way back at the start of the year. If global markets stay steady, we may well stay ranged with a positive bias. However, I would not say we have bottomed out so long as we do not take out 23,200 levels comprehensively.
Considering the strong momentum in the last few sessions, do you foresee the Bank Nifty surpassing the February swing high soon?
No, not that easily. Because before we reach the February swing high, we will have the 100-day MA to navigate; just above that swing high is also the 200-DMA. I think that will be a difficult zone to be taken out that easily by the Nifty Bank Index.
Which two stocks look attractive for buying and why?
One stock would be Prestige Estates Projects from the realty space. The stock has seen an emergence of a bullish divergence of the RSI (Relative Strength Index) against the price. It has made hard attempts to put a base in place. The stock is expected to relatively outperform the broader markets.
Another stock I am looking at is One 97 Communications Paytm. This financial services stock is forming a large bullish formation on the higher timeframe chart and has potential to return good gains over the coming months.
Do you expect the rally to continue in Max Healthcare Institute and CAMS? Are you bullish on both?
Max Healthcare Institute has rebounded off its 200-DMA. It has the potential to test Rs 1,200-1,250 levels. Computer Age Management Services (CAMS), on the other hand has shown a technical pullback. But the stock has a formidable resistance to navigate just above Rs 4,200. I believe a rally in CAMS can take a breather anywhere above the Rs 3,950-4,000 mark.
Do you strongly believe that the Nifty IT will test the 200-week EMA and the June 2024 lows before entering into healthy momentum?
No, it is unlikely. The IT Index is in a bottoming out process; it is also shown improving its Relative Momentum when plotted on the Relative Rotation Graph (RRG) and benchmarked against the broader Nifty 500 index. I believe, to test 200-week EMA, it will need a significant decline from the current levels which is not likely.
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