On the upside, Nifty50 can aim for 20,521, which is the next Gann level. Prices can move towards the level of 20,700 in December 2023 after which we can see some profit-booking, Ashish Kyal, CMT, founder and CEO of Waves Strategy Advisors, says in an interview to Moneycontrol.
Among sectors, he believes over next few months, the IT sector will be in focus and can take the leadership role for the up-move. "The overall tone for IT stocks and sector looks bullish."
Kyal, with more than two decades of experience in the capital markets, says it is best to use dips as buying opportunity in Bank Nifty, as long as the support of neckline near 44,200 stays intact. Rotational buying can continue in stocks that can help index sustain at higher levels, he feels.
Excerpts from the interview:
Are you super bullish on the market trend? Is the Nifty50 eyeing 20,500 or 21,000 in December itself?
On the Nifty, we have been bullish since the low was formed near the 18,838 levels and also as discussed in earlier interviews. Level of 18,838 was as per Gann square of 9. Since that level we can see Impulse wave on upside as per Elliott wave and currently prices are in wave 3rd which is usually one of the strongest legs.
Also prices have not given close below prior day’s low since 12 trading sessions in a row. This is simplest way to follow the trend and keep using dips to buy.
On upside we can aim for 20,521 which is next Gann level. Prices can move towards the level of 20,700 in December 2023 post which we can see some profit booking. On downside, important support is at 19,980 levels.
Stock-specific action can also continue during this period and we are seeing overall healthy advance decline line suggesting broader participation.
Bank Nifty continued with its higher highs, higher lows for the entire last week. Do you expect a 2,000-point rally in the coming weeks, especially after breakout of an inverted head-and-shoulder pattern?
Bank Nifty has started showing strength from the lows of 43,200 before the Nifty started moving higher. Also prices have given break above the neckline of inverted head-and-shoulder pattern giving a target of 46,400 levels on upside.
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It is best to use dips as a buying opportunity as long as the support of neckline near 44,200 is intact. We can see strong trend in stocks like Axis Bank, HDFC Bank and participation is yet to be seen in other banking stocks like ICICI Bank, SBI.
So rotational buying can continue that can help index sustain at higher levels.
Do you think the Nifty IT is making itself ready for sharp up-move in the coming weeks, considering it is on the verge of long downward sloping resistance trendline, adjoining highs of January 4, 2022 (record high) September 15 this year?
In our earlier interviews we have mentioned almost two months prior that IT sector has formed triple bottom and is coming out of long haul of correction. Over next few months IT sector will be in focus and can take leadership role for up move.
Nifty IT index is currently trading at 32,598 and we can expect it to move to 34,700 levels. Support for the index on downside is near 31,000 levels. Overall tone for IT stocks and sector looks bullish.
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The Nifty FMCG has finally broken out of its consolidation phase. Are you bullish on the space and is it ready for a march towards 55,000?
The FMCG sector continued to rise after giving a breakout of the consolidation. Currently prices are trading near 53,850 and looks to have forming Rounding Bottom pattern. A close above 54,350 can confirm breakout of the said pattern and then a fresh leg of the rally can be expected taking prices to 55,000 and higher levels.
Do you expect major profit-booking in New India Assurance Company after solid journey in November?
NIACL showed rally of more than 95 percent in November. For the next few days we can expect some profit-booking towards Rs 209 levels as it will also give time to RSI (relative strength index) to cool down. After which, the fresh rise is expected.
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The overall trend still remains positive as overall momentum is also strong. Also, not a single candle has closed below previous day's low in this entire rally which shows strength in ongoing trend.
Do you think BHEL has started its upward journey now and may hit its previous record high in coming months?
BHEL has shown strong rise in the month of November and has continued to rise with start of December. The overall indicator is in overbought zone so short term dips can be used to enter the stock. The support of the stock is near Rs 140 levels which is also prior price action support area. Previous peak for BHEL is at Rs 200 levels.
Your top two bets for December...
The stock has just given a breakout of the consolidation in Friday's session which lasted for 5 months. Volumes are picking up. Momentum is building as KST (Know Sure Thing) is trading near the zero line after turning above signal line. So, a breach above Rs 817 can result into a good rise in this stock with the targets of Rs 840-850. While on the downside Rs 784 is the nearest support level.
The stock has formed a Cup and Handle pattern. In Friday's session prices just gave a breakout of it. But follow up action is pending.
Trend looks positive as MACD (moving average convergence divergence) has also shown a positive crossover. A break above Rs 1,690 is must for further bullish momentum to continue, while on the downside, Rs 1,580 is the nearest support.
Is it time to go gung-ho on the Nifty Energy space that previous record high in current week?
Nifty Energy sector is touching lifetime highs above the prior peak of 29,100 levels. The breakout is along with strong bullish candle. Price action support for the index is at 28,200 levels.
On upside, the index can aim 31,000 levels over coming months. Short term profit booking cannot be ruled out but that will be an opportunity to enter into this index.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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