"Nifty50 can hit lifetime high levels in June but after a few days of consolidation and base formation," said Ashish Kyal, Founder of Wavesstrategy.com, in an interview with Moneycontrol.
He feels the short-term correction is not ruled out in Nifty50, but after that, one wave on the upside can take the index to lifetime high levels.
The Nifty CPSE index has shown a rise of more than 175 percent from the lows formed during Covid 2020. On the weekly chart, "we do not see any bearish pattern formation even now in Nifty CPSE and it is best to use dips as buying opportunity," the Chartered Market Technician with vast experience in the capital markets says.
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Q: Is it unlikely for the Nifty50 to hit its record high in June, though it is 300 points away from its previous all-time high?
Nifty has shown a good move on the upside after forming a low near 16,828 in March 2023. Over the past few days, we are seeing a slowdown in momentum as there is profit booking at higher levels.
On the upside, 18,780 is an immediate hurdle as of now. Nifty50 can hit lifetime high levels in June but after a few days of consolidation and base formation.
On the downside, 18,250 is an important support. As long as this level is intact we will be optimistic for an upside move to 18,880 – 18,900 levels. However, selling pressure has been seen post RBI policy announcement on 8th Juney, so short-term correction is not ruled out. But after that, one wave on the upside is pending that can take prices to lifetime high levels.
Q: What is your Elliott Wave theory indicating about the Bank Nifty?
Bank Nifty hit lifetime high levels in May 2023 as we have been expecting. Post that prices are moving in a range. We expect consolidation to continue between 43,300 and 44,500 levels. From the Elliott wave perspective, Bank Nifty is moving in the form of wave 5 which is a mature stage of up move.
We are not bearish but will be cautious over the short term. Breakout above 44,500 will result in an extension of ongoing wave 5 and will open up targets for 45,200 or higher levels. But if we see a sharp correction below 43,300 it will be time to book profits. In a nutshell, for Bank Nifty we require to see more price action over the coming week as it is in the inflection zone!
Q: Is the Nifty CPSE index looking expensive now or do you still see more value in it?
The Nifty CPSE index has shown a rise of more than 175 percent from the lows formed during Covid 2020. This index touched lifetime high levels ahead of many other sub-indices thereby showing a leadership role.
On the weekly chart, we do not see any bearish pattern formation even now and it is best to use dips as buying opportunities. CPSE Index is currently trading at 3,155 and support is at 2,800 levels. On the upside, we can see a move to 3,400 levels over the near term.
Q: Considering the ongoing momentum, do you see Paytm stock reclaiming the Rs 1,000 mark in the coming days?
New-age stocks like PayTM, PB Fintech, and Zomato have shown strong rise on the upside over the past few weeks. PayTM has managed to break above the immediate hurdle of Rs 740 thereby giving a target near Rs 970 – 980 levels. The weekly chart is bullish as long as we do not close below the prior weekly low which is at Rs 707 levels.
Also, the last weekly movement is one of the strongest that we have seen since February 6, 2023. It is important to trade these stocks with strict stop-loss of Rs 707 to trade these types of high momentum stocks. For now, use dips to Rs 780 as the opportunity to enter for move to Rs 740 levels.
Q: Do you see more value in Mazagon Dock Shipbuilders after stellar run last week with huge volumes?
Mazagon Dock has shown strong volume breakout in last week. The stock managed to take out its previous high of Rs 936 with good volumes. Daily RSI (relative strength index) is quoting near 80 levels so it is better to buy on dips.
Overall, momentum is still good and dips to Rs 940 – 950 levels can be used to enter the stock with support near Rs 840 for a move to Rs 1,200 levels.
Q: One stock that will be on your radar for the coming weeks and looking attractive enough for investment?
Larsen and Toubro is showing a good trend and looks attractive at current levels from an investment perspective. This stock is outperforming within the sector. We can expect a target of Rs 2900 over the medium term and Rs 2,080 as immediate support.
Q: Do you see Tata Motors hitting record high soon?
Tata Motors is probably starting wave 3 on the upside which is usually the strongest leg as per Elliott wave perspective. Despite higher interest rates we are seeing outperforming within the auto space.
This stock has started the uptrend and we can expect to not only touch lifetime highs but eventually move to Rs 800 or higher levels. When the interest rates cycle turns back on the downside auto sector can gain further momentum. It is the right time to invest in this stock from a medium to long-term perspective.
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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