Considering the current chart structure, weak momentum, and cautious global sentiment, it seems the bears are likely to retain control in the coming sessions, said Sudeep Shah of SBI Securities in an interview to Moneycontrol.
According to him, unless a strong positive trigger emerges, a decisive bullish comeback appears unlikely in the near term.
However, he is bullish on Marico and InterGlobe Aviation for next week. "Both stocks are trading above all short and long term moving averages. "These averages in case of Marico are on a rising trajectory, which is a bullish sign, while momentum-based indicators suggest strong bullish momentum in IndiGo," said the Deputy Vice President and Head of Technical and Derivative Research at SBI Securities.
Have you adjusted your overall trading strategy after Nifty lost 1,000 points from its recent swing high? What will be your strategy for the upcoming week?
Global markets were rattled this week (ended April 4) as a wave of risk-off sentiment swept across equities, triggered by the imposition of reciprocal tariffs on the US trade partners. The escalating trade tensions have reignited fears of a slowdown in global economic activity. As Wall Street tumbled and Asian indices followed suit, the ripple effect reached Indian shores, with the Nifty reacting sharply to the global sell-off. But beneath the headline noise, what are the charts really telling us?
Recently, the benchmark index Nifty has failed to sustain above its prior swing high and thereafter started witnessing gradual selling pressure. From the recent high of 23,870, the index has tumbled by over 1,000 points in just 8 trading sessions. Along with this fall, the index has slipped below its short and long term moving averages, which is a sign of weakening momentum. Adding to the bearish sentiment, the daily RSI (Relative Strength Index) is trading below its 9-day average, and the fast stochastic has slipped below the slow stochastic line.
Together, these signals point to a clear loss of bullish strength and suggest that bearish momentum is currently in play. Sector-wise, the broader market is also under pressure. Barring a few pockets like private banks, select financial services, and FMCG, most sectoral indices are trending lower. In light of this, a cautious approach is advisable over the next few sessions.
Talking about crucial levels, the zone of 22,400-22,350 will act as immediate support for the index. If the index slips below the 22,350 level, then we may witness a further correction upto the 21,900 level in the short term, while, on the upside, the 20-day EMA zone of 23,100-23,120 will act as a crucial hurdle for the index.
Do you think the bulls can make a comeback and support the market, or will the bears continue to maintain tight control over the market in the coming week?
Considering the current chart structure, weak momentum, and cautious global sentiment, it seems the bears are likely to retain control in the coming sessions. While minor pullbacks may occur, the inability to sustain above key levels indicates continued pressure. Unless a strong positive trigger emerges, a decisive bullish comeback appears unlikely in the near term.
Will Bank Nifty be able to surpass the March swing high and easily reclaim the 53,000 level in the current series?
Bank Nifty has been consistently outperforming the frontline indices over the past few trading sessions. While the Nifty has declined over 2.50 percent this week, Bank Nifty has remained relatively resilient, shedding just 0.12 percent. Notably, the ratio chart of Bank Nifty versus Nifty has hit a 67-week high, signaling continued outperformance.
The banking index is also holding firm above its short and long-term moving averages, with the daily RSI comfortably placed in bullish territory. This overall chart structure suggests that bullish momentum remains intact for Bank Nifty. Talking about crucial levels, the zone of 52,000-52,100 will act as an immediate hurdle for the index, while, on the downside, the zone of 50,800-50,700 will act as a crucial support for the index. If the index slips below the 50,700 level, then we may witness a correction upto the 50,000 level.
What are your top two picks for the upcoming week?
The stock has been strongly outperforming the frontline indices since the last couple of trading sessions. Despite the sharp sell-off in frontline indices, the stock has continued its northward journey along with relatively higher volume. Also, it is trading above its short and long term moving averages. These averages are on a rising trajectory, which is a bullish sign. Hence, we recommend accumulating the stock in the zone of Rs 680-670 level with a stop-loss of Rs 650 level. On the upside, it is likely to test the level of Rs 730 in the short term.
Since the last couple of trading sessions, IndiGo has been trading in sideways range, and it has formed a Bullish Flag like continuation pattern on a daily scale. As the stock is trading at an all-time high level, all the moving averages and momentum-based indicators suggest strong bullish momentum in the stock. Most noteworthy, the daily RSI is in a super bullish zone as per RSI range shift rules. Hence, we recommend accumulating the stock in the zone of Rs 5,100-5,050 levels with a stop-loss of Rs 4,870 level. On the upside, it is likely to test the level of 5,430 in the short term.
Do you expect the rally to sustain in Angel One and Power Grid?
At this point, it seems unlikely that the rally in Angel One and Power Grid will sustain in the immediate term. Both stocks have shown strong upward momentum recently, but Friday’s session witnessed noticeable profit booking. The current chart structure suggests that they may enter a consolidation phase over the next few trading sessions. Additionally, the daily RSI for both stocks has given a bearish crossover, pointing to a loss of momentum and indicating limited upside in the short term.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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