"After some profit booking we can start seeing positive attempts in the Nifty50 again in the first week of July. Move above 18,800 will open targets for 19,111 which is 5th wave target as per Elliott wave," Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors says in an interview to Moneycontrol.
The Chartered Market Technician, who is known for his expertise on Elliott Waves, and Time Cycles, expects swift move in Exide Industries and BSE. "Both stocks seem to be in its third Impulsive Wave as per Elliott Wave pattern, which is usually the strongest wave," he said.
Among sectors, he feels the short term correction is possible but the medium term outlook is bullish for Nifty CPSE.
What is your take on the market as the Nifty50 is struggling a lot to get past its previous record high, though the BSE Sensex already had fresh all-time high last week?
Nifty50 touched levels of 18,886 on June 22 and missed crossing lifetime highs by just a point. However, on closing basis prices have still managed to close at highest ever closing at 18,856 on June 21. There have been several attempts to break the barrier of 18,887 but there is also rejection from higher levels.
Bank Nifty has also failed to support in last week. So, over near term we can see consolidation or profit booking for few days and there can be another attempt to move towards lifetime high levels. On downside, support is near 18,460 levels.
There is short term Time cycle which will turns up near July 6, 2023. So, after some profit booking we can start seeing positive attempts again in July first week. Move above 18,800 will open targets for 19,111, which is 5th wave target as per Elliott wave. So, index can show profit booking in expiry week before we turn up again.
Do you expect the consolidation and rangebound trade to continue in the Bank Nifty or do you see the index breaking 44,500 in monthly expiry week?
Bank Nifty touched lifetime high levels on May 30, 2023 much ahead of Nifty but has been drifting lower since then. Index is trading near 43,600 and breaking above 44,500 in monthly expiry week looks difficult. There is possibility for us to see index near 43,200 levels with few more days of consolidation before we start inching up again.
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A few banking heavyweights like SBI and ICICI Bank have shown correction in earlier week whereas HDFC Bank has managed to move back up, thereby resulting into sideways consolidation on Bank Nifty. Over near term, Bank Nifty has support at 43.200 and hurdle near 44,050. Breakout of this range is required for the Banking index to trend in that direction.
The Nifty CPSE index has been hitting fresh all-time high for almost every month this year. Is it looking overbought or will the momentum continue in rest of year?
Nifty CPSE index touched lifetime high levels of 3,259 on June 22. Post that, we are seeing profit booking and index closed below prior day’s low after nearly 15 trading sessions. On daily timeframe, we are also witnessing slowdown in momentum in the last week as prices are exhibiting negative divergence with respect to momentum indicator RSI (relative strength index).
Medium term trend for this index is positive and after a brief correction we can expect it to again turn back on upside. So, correction or dips from here can be used as opportunity to add onto the stocks from this index to ride medium to long term uptrend.
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Support for Nifty CPSE index is near 3,044 and as long as this level is intact the medium term trend is positive as per simple Dow Theory concept of higher highs and higher lows formation. In a nutshell, short term correction is possible but the medium term outlook is bullish for Nifty CPSE.
Two stocks that can possibly see swift rally next week?
Exide Industries has shown impulsive rise from the lows of Rs 170, which was made on March 28, 2023. As per Elliott wave the stock seems to be in its 3rd Impulsive wave which is usually the strongest wave. As long as Rs 215 level is intact, any pullback can be used as an opportunity to buy this stock for a move to Rs 260 levels. Stock is also showing good volumes with rise and strong momentum.
Another stock is the Bombay Stock Exchange (BSE). There is a strong volume breakout on upside and the stock bounced back from its 10 and 20-day moving average. Also, this stock seems to be in its 3rd impulsive wave as per Elliott wave pattern. Possible Fibonacci target comes near Rs 660 on upside as long as Gap area support near Rs 570 is protected.
Do you expect Adani Enterprises to break the big trading range created in the week ended May 26, soon? Will there be a sharp rally post range breakout?
Adani Enterprises on Friday, June 23, 2023 showed break down from the consolidation range. The stock has major hurdle near Rs 2,430, which is the 20-day Moving average. Downside support is at Rs 2,000 levels.
As of now, breakdown in last week suggests short term correction to lower levels unless prices manages to break above Rs 2,430 levels.
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.
Follow Ashish Kyal on Twitter - @kyalashish
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