ITC likely to hit Rs 460 this year, Persistent Systems may see profit booking, says this technical chartist

It is challenging to assert that the Nifty is unlikely to go below the 17,000 level this calendar year given the fast-changing and volatile climate in which we live. However, there is a significant probability that the Nifty will be able to maintain its 200-day DMA, which is located around 17,300, in the near future. The fact that the Nifty is still in a bullish territory (above the 200-day daily moving average) in spite of the pessimism in the market shows that it is resilient.

There is a good possibility that the Nifty will establish its base in the 17,500-17,000 zone for this calendar year if there are no further hiccups in the near future, but any unexpected negative events could cause the Nifty to fall below 17,000.

Do you think the Nifty PSE index is still in a long consolidation mode, or is it trying to break out of the same?

Since 2007, the Nifty PSE index has been moving in a range, with the upside cap being around the 4,500 mark and the base at 2,000. For a multi-year breakthrough that might trigger a significant rally in the PSU area, it must see a decisive move over the 4,500 level.

A closer look at a smaller time frame reveals that the near-term base has moved to the 3,600 level and that a bullish flag is forming, which increases the possibility of an upside breakout in the near future.

Are the charts telling you that Adani Group stocks will see some more correction in the coming days, or is there any value buying emerging in these stocks?

If we look at the charts of the front-line Adani stocks — Adani Enterprises, Adani Ports, Ambuja Cement, ACC — there is a bullish hammer candlestick pattern, which is a classical sign of a near-term bottom.

So we can expect temporary relief in these stocks, but there will be a risk of selling pressure at higher levels. However, if we look at the other stocks of the Adani Group, then there are still no signs of a reversal.

Do you see any possibility of ITC going beyond Rs 500 in the current calendar year?

ITC is beating the market and has been in an uptrend since the beginning of 2022. On the weekly charts, a bullish flag formation has broken out, if we look at the technical structure.

The pattern's target level is somewhere around Rs 460. We can therefore expect at least Rs 460 in this year. A move above the Rs 500 mark cannot be ruled out given the strong overall strength.

Do you think the current consolidation in the Nifty Auto index is likely to see a decisive breakout on the higher side, crossing the 14,000 mark in the coming weeks?

The Nifty auto index is performing comparatively well. For the past six months, it has been consolidating in the 12,200–13,500 zone while developing a bullish flag pattern. There is considerable probability that it will these an upside in the near future, which may result in significant gains for auto stocks.

The Nifty Auto Index's immediate target is the 14,000 level, and the target per the flag patterns is the 16,400 level.

The biggest gainer in the current calendar year is Persistent Systems, up 25 percent so far YTD. Do you expect more run-up in the stock going ahead?

Persistent Systems is gaining ground and outperforming the Nifty IT index. However, it is near an important supply zone of Rs 4,950–5,000 where we can expect some profit booking. If it manages to break out this zone, then we can expect a further rally towards Rs 5,250–5,000 levels. On the downside, Rs 4,400 will act as a strong support.

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