The Nifty may test the next rally towards 12,000-12,200, for Bank Nifty, it may move towards the level of 31,000-31,200, Sumeet Bagadia, Executive Director, Choice Broking, said in an interview with Moneycontrol's Kshitij Anand.
Edited excerpts:
Q: Can we say that we have made an intermediate top on Nifty and Nifty Bank? If not, then what is the level to watch out for?
A: Nifty and Bank Nifty has performed well in the last couple of weeks and made a new high on April 3. However, we have seen further selling pressure in the last two days, which could be a part of profit booking from the higher levels.
Although, the trend is still looking bullish as every sector is contributing in Nifty’s gain but still there are few sectors left that haven’t performed well and it seems that they might pick up the steam based on this rotational movement.
Hence, we are seeing a further upside movement in the index. However, volatility will be very high due to the upcoming Lok Sabha election and based on the current sentiment, the index is looking good even from the present level.
The Nifty may test the next rally towards 12,000-12,200; and for Bank Nifty, it may move towards 31,000-31,200.
Q: Are there any specific trends that you are spotting in markets?
A: The market has the strength to make new highs. The metal sector has confirmed “Dragonfly Doji” candlestick on the monthly scale which is a good sign of reversal and we can expect the Nifty Metal index to touch 3,480 soon.
Looking at the stocks, we can see Hind Zinc showing strength. On the monthly scale, the stock has confirmed Three White Soldier formation that shows reversal move and signals for an uptrend in the counter.
On the other end, Infra sector is also showing good strength. On the weekly scale, Nifty Infra has given a breakout above the neckline of its Double Bottom formation which is a bullish reversal pattern and suggests northward run in the counter. The immediate resistance for the index is placed at 3,316 and for a longer term, it may touch 3,530.
Q: Despite that Nifty hit a record high, mid and smallcap indices are down in double-digit percentages. What does it say about the strength of the rally?
A: Few large-cap stocks are performing well that are contributing high in the index gain. However, if we talk about mid and smallcap, steam is gathering to give a breakout based on the charts.
Both indices are trading near 6-months high ahead Lok Sabha elections. We can expect further volatility in the market.
Q: How are the stocks looking on charts that hit 52-week high this week?
A: As many as 28 stocks in BSE500 index hit 52-week highs in April. Some of them are:
Bajaj Finance: Target: Rs 3,390
On a monthly chart, the stock has shown good strength and is trading above 52-week high that indicates more bullishness in the upcoming trading session.
On the daily timeframe charts, the price has also given a breakout of upward Rising Channel formation with good volume activity. Hence, we expect more upside move in the stock towards the level of Rs 3,390.
HDFC: Target: Rs 2,273
On the technical chart, HDFC is also looking bullish. The stock has been trading above its upper band of Symmetrical Triangle pattern and has also moved above 21 and 50-Day Moving Averages, which signals bullish move in the stock towards the level of Rs 2,273.
During the week, the stock has breached its major resistance of Rs 920 and sustained above it that indicates bullish strength in the counter.
However, in the prior session, the stock has made a Doji candlestick pattern at higher levels and fell down from there but the next day of the session we saw a gap-up opening with average volume activity.
The gap-up move along with average volumes took the stock to a high of Rs 986.95. Based on the above technical structure, we expect more bullish trend for the upcoming session.
Bajaj Finserv: Target: Rs 7,490
On the weekly chart, the stock has given breakout from its Ascending Triangle pattern, which is a continuation formation and indicates bullish movement in the prices.
In addition, the daily price has shown higher-highs, higher-lows formation that signals continued bullish setup in the counter. Hence, we expect more bullish trend in the prices and it may test the next level of Rs 7,490.
Pidilite Industries: Target: Rs 1,360
On a weekly scale, the stock has given a breakout of its inverse head and shoulder pattern which is a reversal formation and signifies that the stock may go up in coming trading sessions.
On a daily chart, the stock has been trading with a positive crossover of 21 and 50-day Moving Average that shows a bullish movement in the counter.
Additionally, weekly momentum indicator RSI reading is at 67.81 and has given a breakout of previous resistance with a positive crossover that points to a positive breath in the stock. Hence we expect the bullish rally towards Rs 1,360.
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