At this juncture, there is no such sign which confirms that the pain in the broader market is over. Also, unless we do not see benchmarks settling and confirming a bottoming formation, small and midcaps automatically would not give any returns, Sameet Chavan, Chief Analyst- Technical & Derivatives, Angel Broking, said in an interview with Moneycontrol’s Kshitij Anand.
Q) The momentum fizzled out in December after a gain of 5 percent in November. Do you see a bounce back next week when much of the uncertainty is out of the way with respect to the outcome of state elections? What are the charts suggesting?
A) While the November expiry week ended on a promising note, the market participants were completely baffled with the market moves in the week gone by.
The earlier breakout zone of 10,770-10,800 was expected to act as a crucial support on the pullback moves, but a plunge in the global markets caught market participants on the wrong foot as index breached this range with a downside gap.
Charts are also a bit confused at this moment and it seems we are awaiting the outcome from crucial event i.e. state election results. We had a breakdown, but once again some recovery on Friday left everyone clueless.
Q) Small and midcaps struggled in the first week of December. Do you think that the pain is here to stay and investors should look at largecaps?
A) At this juncture, there is no such sign which confirms that the pain in the broader market is over. Also, unless we do not see benchmarks settling and confirming a bottoming formation, small and midcaps would automatically would not give any returns.
Q) Exit polls and state election results will keep markets volatile. What should be the investment strategy for investors as we approach the mother of all events – general elections next year?
A) There is ample time for the general elections which are slated next year. Before this, there are a lot of key events lined which will set the tone for a near-term trend.
Q) What are charts of Bank Nifty suggesting?
A) Amongst the sectoral indices, the Nifty bank index rebounded higher from its support zone of 200-day SMA in Friday’s session. In case the market moves higher in the coming week, Bank Nifty will play a vital role in it and traders should hence be watchful on the stock from this sector.
Q) Top three trading strategies for the coming week with an investment horizon of 1 month?
A) At this juncture, we like ‘Dmart’ which has clearly been bucking the trend and hence considering the weekly chart, one can look to go long for a target of 1,710 and stop at 1,397.
Apart from this ‘Britannia’ looks a bit promising as it’s been maintaining its position above recent breakout point. Hence one can go long for some immediate upside of 3,280 and stop loss at 2,880.
From the midcap space, ‘Sun TV’ at major supports formed a Dragonfly Doji pattern which we believe could give a decent move towards 640 and Stop at 568.
All these recommendations should be considered if there is no unfavorable outcome from the major events lined up in the forthcoming week.
Disclaimer: The views and investment tips expressed by this 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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