A dip towards 15,000 for the falling Nifty cannot be ruled out going by the trend in the markets, and analysts have set this as the base case scenario. If the level of 15,000 is broken on a closing basis, then the index can go down to 14,400, feels Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas.
In an interview to Moneycontrol, he shares that the auto index will continue to outperform and will surpass its record high soon. Excerpts from the interview:
Do you expect the IT sector to consolidate for a couple of quarters before turning into positive mood?
The Nifty IT index has been consolidating since the last few weeks. Structurally, the consolidation is near its maturity. So the sector can turn positive much earlier than that. In fact, short to medium term reversal could be around the corner over the next couple of weeks.
Do you think chart patterns and sentiment indicators hint at another round of major correction in the market in second half of CY22?
A dip towards 15,000 can not be ruled out. That's the base case scenario we are considering. However, if the level of 15,000 is broken on a closing basis, then the index can go down to 14,400. If we look at the entire correction that started from October 2021, then it has taken the form of a broadening formation and lower end of that pattern is near 14,400.
Even after a significant run-up since the March lows, do you think the auto sector will surpass its record high soon and will turn out to be a multibagger?
Multibagger in coming quarters will be a too optimistic expectation. Nevertheless, the Auto index can definitely continue to outperform and is expected to surpass its record high soon.
Technically, do you think oil is the last one to collapse?
A correction in crude oil is very much on the cards. In fact, it has started showing the weakness. It has started forming lower highs, which indicates that it is preparing to cool off. This can surely support the Indian equity market.
What are your charts and oscillators telling about rupee that has already seen significant depreciation against the dollar?
The rupee is clearly on an uptrend i.e. depreciating against the US dollar. Despite the overbought readings in the daily and weekly oscillators there is no sign of reversal yet. As per the charts, crucial targets are placed near 80-80.60 zone. Thereon the currency pair can get into a consolidation mode.
By looking at charts, have you spotted any sector that can see major correction or up move in the coming months?
The auto and IT sectors are expected to outperform in the coming months. Autos have been showing strength and can continue to remain strong whereas IT is gearing up for a reversal.
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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