Chartist Talks: Nifty Pharma likely scaling towards 20,000 mark in May, no overbought conditions in BHEL, says Jatin Gedia

Jatin Gedia is the technical research analyst at Sharekhan by BNP Paribas

"BHEL continues to rise higher keeping the higher top and higher bottom formation intact. The upmove has been supported with volume," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said in an interview to Moneycontrol.

On the momentum indicator, "we do not see signs of loss of momentum nor BHEL is overbought," he said.

Jatin, with more than 10 years of experience in the financial services industry and expertise in technical research, feels the consolidation is likely to breakout on the upside in the Nifty Pharma index. "There is a high probability of the consolidation to complete during the month of May and scale to hit the 20,000–20,400 mark," he said.

What is your trading strategy for the next week's Nifty and Bank Nifty expiry after reading the charts? Will the index surpass 23,000 by next week?

Nifty has been trading in an upward sloping channel. The Nifty has faced resistance at the 22,770–22,800 zone and faced sharp selling pressure. Daily momentum setup also suggests loss of momentum on the upside. The ideal strategy to trade in such a scenario is to buy on decline near support.

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Jatin Gedia

Technical Research Analyst|Sharekhan by BNP Paribas

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The support for Nifty is at 22,400–22,380 and for Bank Nifty at 49,000-48,750. Taking into consideration the chart pattern and the overall structure, a consolidation is highly likely and the index could take more time to reach the 23,000 mark.

Do you see BHEL continuing higher highs, higher lows formation in coming months?

BHEL continues to rise higher keeping the higher top and higher bottom formation intact. The upmove has been supported with volume and on the momentum indicator we do not see signs of loss of momentum nor it is overbought. Hence the probability of an uptrend continuing is quite high.

Is Ashok Leyland looking overbought now?

The daily RSI (relative strength index) reading of Ashok Leyland is at 80, which indicates an overbought reading. However, it may not necessarily translate into an immediate pause or trend reversal. The stock may just witness a slowdown in the pace of advance.

Do you expect the Nifty FMCG to break the consolidation towards northward and easily hit record highs in coming weeks?

The Nifty FMCG index has corrected ~9.5 percent since the beginning of January 2024. The index has recovered from the sub-52,500 mark but is still substantially below its all-time high of 57,967. There are signs of trend reversal on the daily time frame chart and has resumed its upmove.

A new high is likely to take more time and effort from key heavyweights like Hindustan Unilever and ITC will help the index scale new highs.

Are the charts telling that the Nifty Pharma index to surpass its record high soon and hit 20,000 mark in the coming weeks?

The Nify Pharma index has been consolidating between 18,300 and 19,400 since the second week of March. The consolidation is likely to breakout on the upside. There is a high probability of the consolidation to complete during the month of May and the scale to hit the 20,000–20,400 mark.

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