"If we have to take a view for a few months, it’s evident that the Bank Nifty will cross the 50,000 milestone, but it’s hard to predict if it would be reached in January itself after such a steep rally in a short span," Sameet Chavan, vice-president for technical and derivatives at Angel One, says in an interview to Moneycontrol.
So, with the present trend, it should not be a surprise to see the Nifty FMCG heading towards 58,000 - 59,000 in the coming week, but if it has to reach the milestone of 60,000 and beyond, the heavyweight counter ITC needs to chip in, he says.
With more than 16 years of experience in the stock market, Chavan believes that irrespective of the benchmark index’s move, the IT space is likely to outperform in the near term. "We expect the IT index to reach 37,000-38,000 soon and even challenge its previous highs of 39,500." Let's take a look at the conversation he had...
Do you expect the momentum to take the Nifty 50 beyond 22,000-23,000 in January series, though currently it looks overbought?
In such kind of strong rally, it’s pretty difficult to judge where this momentum will start. But going by the observations, although it’s favouring the bulls, the caution is warranted due to elevated levels, indicated by overbought indicators and prices deviating significantly from key moving averages.
Hence, upcoming sessions would be crucial, with the market now focusing on the pre-Budget move (interim budget) after recent positive developments. Hence, rather than being vocal on any levels, it’s advisable to stay focused on how market behave in the first half of January.
Do you expect the Bank Nifty to surpass 50,000 in the January series?
The commentary remains same for this high beta index as well. If we have to take a view for few months, it’s evident that Bank Nifty will cross the milestone of 50,000; but it’s hard to pre-empt meeting it in January after such a steep rally in a short span.
Are the charts telling you that the Nifty FMCG index is marching towards 60,000 in the next couple of months?
Top five constituents in Nifty FMCG are ITC, Hindustan Unilever, Nestle, Britannia Industries and Tata Consumer Products, which hold a weightage of nearly 73 percent. Barring ITC, all others are in a strong momentum at this juncture, indicating possibility of this index extending its gains in the coming series as well.
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So, with the ongoing trend, we will not be surprised to see the Nifty FMCG index heading towards 58,000 - 59,000 in the coming week. But if it has to reach the milestone of 60,000 and beyond, the heavyweight counter ITC needs to chip in. It has a weightage of nearly 31 percent and hence, will provide the much-needed impetus to reach new heights.
Your top 2 picks for January that has seen strong breakout signal recently?
The entire IT space finally found its mojo after a long slumber phase. Most of the frontline as well as midcap counters have already moved a quite bit in recent months. But now it’s time for ‘Wipro’ to outshine. The stock has already confirmed its multi-month breakout last week. We expect price targets of Rs 498-510 in the coming series. One can look to buy on a decline with stop-loss around Rs 448.
From the broader market, we like KRBL as it has started to show early signs of revival. Prices have confirmed a price volume breakout on Friday, we like it for a target of Rs 398 and stop-loss at Rs 362.
Do you think the Nifty IT has seen consolidation before entering into another leg of upward journey towards 37,000-38,000 levels in coming weeks?
In our sense, irrespective of benchmark index’s move, the IT space is likely to outperform in the near term. It has already completed its 20-month price wise as well as time wise correction phase.
Hence, in case of any minor consolidation or smaller declines, it would offer excellent buying opportunity to buy into this pocket. Soon, we expect the IT index reach 37,000-38,000 levels and even challenging its previous highs around 39,500 cannot be rule out.
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Will the major downward move be looking unlikely in Nifty Auto index in 2024 after looking at the chart structure?
Auto has been one of the few sectors who initiated this Bull Run last year. Since then, there has been no stopping for this for this space. In fact, Auto sector is considered as a barometer of country’s economy, demonstrates the robust growth.
Despite this being in a strong momentum, one should avoid being complacent at current levels. Technically, the daily chart exhibits a ‘Negative Divergence’ in ‘RSI-Smoothened’ oscillator. Hence, any time we could see some breather in this rank outperformer before unfolding the next leg of the rally.
Do you see major breakout in Hindustan Unilever soon after reading its charts?
Overall, this stock has done nothing since last couple of years; but now we are seeing some early signs of revival. On the smaller time frame charts, prices are gaining strength day-by-day and importantly, it has managed to surpass its intermediate hurdle of Rs 2,640 on a closing basis. With FMCG index trading at record highs, this stock needs to catch up now and there is high possibility that we would see this stock breaking the shackles in coming days.
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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