Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy, says Rajesh Palviya of Axis Securities.
Midcap index is expected to move towards 16,000-16,500 and smallcap index is expected to move towards 15,700-16,200 levels. Overall, mid and smallcaps are expected to outperform frontliners in short to medium term, Rajesh Palviya, Head Technical & Derivatives Research at Axis Securities, told Moneycontrol’s Sunil Matkar in an interview.
Q: Nifty has been rising gradually but not getting enough strength to move above 11,800 levels. What is your reading?
A: Nifty managed to break out of past couple of weeks' range of 11,760-11,560. The upward breakout indicates bullish sentiments in short to medium term. The index is moving in a Higher Top and Higher Bottom formation on the daily as well as on weekly chart indicating sustained up trend.
The chart pattern breakout suggests that if Nifty sustains above 11,760 level it would witness buying which would lead the index towards 11,850-12,000 levels. On the downside, an immediate crucial support zone is placed around 11,700-11,630 and any violation of this would witness profit booking which would take the index towards 11,550-11,500 levels.
At current levels, Nifty continues to hold and sustain above its 20-day SMA (11,562) support hence, it remains a crucial level to watch for. Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy.
For the upcoming 3-4 weeks, we expect Nifty to trade in the range of 12,000-11,600 with positive bias. The daily, weekly and monthly strength indicator RSI and momentum oscillator Stochastic both are in bullish mode which supports upside rally to continue ahead.
Q: Bank Nifty has been the biggest gainer in the current rally. Do you expect the rally to continue?
A: BankNifty started the week on positive note and managed to give breakout of last eight day consolidation range of 29,700-30,200 on closing basis.
The index is moving in a Higher Top and Higher Bottom formation on the daily as well as on weekly chart representing medium term bullish trend. The chart pattern suggests that if Bank Nifty continues to sustain above 30,500 level it would witness buying which would lead the index towards 30850-31000-31200 levels. On the flip side, immediate support zone is placed around 30200 levels.
Any violation of this support would witness profit booking which would take the index towards 30000-29800 levels. On the daily chart, Bank Nifty continue to hold and sustain above its 20 day SMA (29990) indicating positive bias in the short term.
Q: Can mid and smallcaps continue to outpace frontliners in 2019?
A: By referring to midcap weekly chart, this index has observed reversal in trend as it has formed a “W” trend reversal pattern formation which signifies strength and increased participation at lower levels. This index has formed a firm base around 13,800 levels which remains a crucial demand zone. From current levels, this index is expected to move towards 16,000-16,500 levels in short to medium term.
Smallcap index has witnessed strong breakout from its six months multiple resistance zone of 14,800 on closing basis which confirms trend reversal on short to medium term charts. From current levels, this index is expected to move towards 15,700-16,200 levels in short to medium term.
Overall, mid and smallcaps are expected to outperform frontliners in short/medium term.
Q: Tata Motors has run up a lot in the last few sessions. Do you expect further upside?
A: Tata Motors managed to give breakout of last five month consolidation range Rs 165-200. On the daily chart, stock is now trading above all its important (50,100,200 DMA) long term moving averages and 50 DMA has given upward crossover to 100 DMA which indicates stock is gaining strength on long term charts.
Chart pattern suggests if stock continues to hold above Rs 230 then, we see more upside towards Rs 245-250 in near term where stock may face some supply pressure. In April expiry, the stock is currently up 37% while there was a sustainable increase in open interest to the tune of 26%, indicating Long Build Up witnessed in the stock, and still the trend continues.
Range of the stock can be determined around Rs 220-250 until major changes of data front being witness, overall stock is in positive territory and trend is intact.
Q: What are your top five technical short-term bets?
Buy Tata Consultancy Services at Rs 2,130-2,110 | CMP: Rs 2,134 | Stop loss: Rs 2,085 | Target: Rs 2,230-2,270 | Upside: 6 percent
On the daily chart stock price has decisively broken out its “Triangle” pattern at Rs 2098 levels on closing basis and sustaining above the same.
Stock price is trading above 20 and 50, 100 day SMAs which are important short term moving averages, indicating positive bias in the short to medium term.
Buy TVS Motor Company at Rs 519-513 | CMP: Rs 519 | Stoploss: Rs 506 | Target: Rs 540-550 | Upside: 6 percent
The daily strength indicator RSI and the momentum indicator Stochastic both are in positive territory which supports upside momentum to continue near term.
Buy Motilal Oswal Financial Services at Rs 740-730 | CMP: Rs 742 | Stoploss: Rs 710 | Target: Rs 770-780 | Upside: 5 percent
Stock price is sustaining well above its 20, 50 and 100day SMA which supports bullish sentiments ahead.
Buy Kotak Mahindra Bank at Rs 1,380-1,370 | CMP: Rs 1,383 | Stop loss: Rs 1,350 | Target: Rs 1,460-1,480 | Upside: 7 percent
The stock has decisively broken out its consolidation Rs 1,360-1,365 levels on closing basis and sustaining above the same.
Buy Reliance Industries at Rs 1,345-1,355 | CMP: Rs 1,345 | Stop loss: Rs 1,310 | Target: Rs 1,410-1,430 | Upside: 6 percent
Stock has been taking support of rising Trend line; Stock has seen a consolidation in the range of Rs 1,320-1,360 in last few sessions.
Though the volumes are less, price action suggest positive momentum in the stock going ahead once it sustain above consolidation zone of Rs 1,360.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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