After recording the biggest single-day loss in the current year on February 28 and the largest monthly correction since October 2024, Ashish Kyal of Waves Strategy Advisors believes short term indicators are oversold and pullback is possible.
But as per Time cycle there is possibility of correction either sideways or downside to continue for March before the market can stabilise, according to him.
For the next week, the Founder and CEO of Waves Strategy Advisors advised buying Craftsman Automation, and Mazagon Dock Shipbuilders. Among sectors, "metal is looking attractive in the current market scenario," said Ashish Kyal with more than two decades of experience in the capital markets.
Do you think the worst is almost near the end and the Nifty could stabilise around 22,000 mark?
Nifty has witnessed one of the steepest decline post Covid crash. This suggests that we are retracing a part of entire rise from lows of 7,511 to the high of 26,134. Fibonacci 23.6% retracement support is near 21,800 levels.
Nifty for the past 17 consecutive trading sessions has not given close above its prior day’s high which keeps the daily bias still on the side. In the previous session, prices witnessed a fall of more than 400 points which is the biggest decline we have seen in this year so far. Short term indicators are oversold and pullback is possible. But as per Time cycle there is possibility of correction either sideways or downside to continue for March before we can stabilise. For deeper positive retracement we need to see close above prior day’s high, until then use pullback to sell for a move to 21,800 levels. Immediate hurdle is at 22,580 on upside.
Is the IT sector done with correction?
Nifty IT sector saw one of the biggest declines in previous session. The recent highlight of US President Donald Trump imposing export restrictions on advanced AI chips caused in panic across the global markets. In the Friday’s session, Indian markets were also heavily impacted by the news and the IT sector plunged by -4.18%.
For now, we can expect short-term pullbacks in the sector but it has to consolidate before any meaningful up move is witnessed. Nifty IT index closed at 37,318 in previous session and the 61.8% Fibonacci support is at 36,900. So we can expect short term consolidation around this zone and further price action from here will be important to observe. One can invest in IT stocks in staggered fashion.
Is the January low critical for the Bank Nifty which has been outperforming Nifty 50?
Bank Nifty made a low of 47,844 levels in January 2025 holds significant importance for its future performance. However, the index since February 20 has protected its prior day’s high which is a negative sign. A close above its prior day’s high will be the first sign of reversal which is now at 48,575. Break above 48,575 followed by 48,980 will indicate positive reversal in this index. Any breach below 48,100 will resume the negative trend to 47,844 levels.
What are your top 2 picks for next week amid market weakness?
The stock closed on a positive note with a massive gain of 7.67% on Friday. The stock has formed a rounding bottom pattern on the daily chart. Prices have closed above Rs 4,473 which confirms breakout of the said pattern. Also, ADX (Average Directional Index) is suggesting strong momentum can continue in this stock as it is showing readings of 35.15 which is above 25. For now, one should use buy on dips approach to ride the trend for move to Rs 4,850. On the downside Rs 4,260 is the crucial support.
The stock gained more than 1% despite major indices falling which is a positive signal. In the previous week, prices reversed from the important support of Rs 1,926 levels and a sharp bounce of more than 15% was seen. On the daily chart, now prices are trading close to the mid Bollinger bands post reversing from the lower bands. A decisive break above mid bands i.e. above Rs 2,170 can take prices higher towards Rs 2,400 levels, while on the downside, Rs 2,020 is the support.
Are you bullish on HDFC Bank?
In the previous week on February 24, HDFC Bank reversed from the important trendline support and since then not a single candle has closed below prior day's low which is a positive sign. Along with this, the 5 EMA (Exponential Moving Average) has crossed the 13 EMA (Exponential Moving Average) which is a bullish crossover and indicates that the short term bias has turned positive. So for now, a break above Rs 1,770 which is also a previous swing high can take prices higher towards Rs 1,900 levels followed by Rs 2,000. On the downside, Rs 1,680 is the crucial support.
Do you see new leg of rally in Shriram Finance?
As a disclaimer we have holdings in this stock, Shriram Finance surged more than 6% in 2 trading sessions. Since then, the stock has been one of the top performing stocks in Nifty despite major indices falling which is a positive sign. The stock has immediate hurdle near Rs 620 levels which is previous swing high. Close above this can extend the rally to Rs 660 or higher. On the downside, Rs 585 is the nearest support to watch out for.
Which sectors are looking attractive for investment now?
Metals sector is looking attractive in the current market scenario. It is currently consolidating near the trendline support of 8,120 on the weekly time frame despite sharp fall in other sectors. A breach above 8,320 can result in fresh buying which can lift price higher towards 9,000 levels. The view is valid as long as 7,930 remains protected on a weekly basis.
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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