MC Interview | Won't be surprised to see more opportunities in midcap space, says this technical chartist

Bank Nifty seems to be looking strong especially after RBI policy event and also maintained higher highs higher lows for the fifth week in a row. Do you expect the rally to continue in coming weeks and what is your target for the Bank Nifty?

On the technical aspect, the Bank Nifty is in a cycle of higher highs – higher lows, which signifies a positive development. The ongoing price action construes a robust setup for the index and is highly anticipated to continue the same in a comparable period.

As far as levels are concerned, 43,000-42,900 is likely to cushion any intra-week blip, followed by the sacrosanct support of the unfilled gap of 42,550-42,500. On the flip side, the fresh breakout has opened the potential for the index to march toward the 44,000-44,500 mark in the near future.

The overall structure is buoyant, where any minor correction could be seen as an opportunity to add fresh longs in the index.

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Considering the current consolidation and correction, do you still expect the Nifty to go beyond 19,000 by year-end?

Now, taking a glance at the daily time frame chart, the Nifty is now placed slightly above the key support of '20-day EMA' (exponential moving average) which coincides with previous swing high of 18,450. Hence, we continue to remain upbeat as long as 18,400 – 18,300 is not violated on a closing basis.

Until then, any intermediate decline should only be construed as profit booking before resuming the upward trend.

On the flipside, 18,650 – 18,700 are the levels to watch out for. The moment Nifty surpasses this, one should gear up for yet another milestone of 19,000 which seems possible by year-end.

After significant outperformance of largecaps, do you think now it is time for midcap and smallcaps to run and outperform largecaps?

Traders are advised not to get carried away by such small declines. Rather it's better to focus more on thematic moves, especially from the broader end of the spectrum. The Nifty MIDCAP50 index has given a precise pullback to its breakout point and hence we will not be surprised to see more opportunities unfolding from this space.

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As a technical analyst, what is your best learning experience that you want to share with new traders?

It’s important to have a broader view on the market or a particular stock and then dive deep into smaller time frames -- we should try to catch regular moves or momentum-based trades. Also, it's better to simplify the research tools and there is no requirement to use fancy indicators, it will only add on to your perplexity.

Do you think the Nifty IT is going to hold 29,000 level, where it has taken support twice in the past, and will bounce back in coming sessions?

After a long period of underperformance, the IT space recently had good traction and looked like as if it’s going to come out of the slumber phase. Towards the latter part of the week gone by, once again IT counters underwent some correction; but broadly speaking, we expect Nifty IT index to find support around 29,000 – 28,500.

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