'Nifty likely to face resistance near 100-Week EMA; IT index could rally another 5-7%'

We feel one may still see upsides to the tune of around 5-7 percent from hereon. Hence, we would suggest a buy on dips strategy rather than going gung ho, on the trot, Pushkaraj Sham Kanitkar, VP (Equities) at GEPL Capital, said in an interview with Moneycontrol’s Kshitij Anand. edited excerpts: Q) The market remained volatile throughout l;ast week with 10,800-10,900 levels acting as a major resistance. What led to the price action on D-Street? A) The major part of the volatility can be attributed to the divergence that we have seen in the Nifty vis-à-vis the Bank Nifty. Within the Bank Nifty, we have seen a lot of heavyweights correct whereas the Nifty strength may be attributed to stellar moves in likes of RIL and the IT pack. This in a way has created a lot of fatigue where both the bulls as well as bears have had a real tug of war. Q) What are the major levels which one can watch out for in the coming week? A) The major levels on the upside are 11,029 (100-Week EMA) followed by 11,389 (78.6 percent Fibonacci retracement of the earlier fall). The weekly low of 10,562 (read 10,550 as it houses the 61.8 percent retracement level @ 10,544.8) would be the major support in contention. Q) What do you make of the recent results which have come out from the IT space? Majority of the stocks hit a fresh 52-week high in the week gone by. What should investors do if they want to invest in the IT space? A) The major flow for the IT Index has been the NASDAQ in the US hitting all-time highs, and which the Nifty IT too replicated in stride. The robust results further boosted the inflows in terms of the defensive sector. We feel one may still see upsides to the tune of around 5-7 percent from hereon. Hence, we would suggest a buy on dips strategy rather than going gung ho, on the trot. Q) Twitter Bitcoin hack is something which came out of the blue. A similar scam happens when retail investors, especially the new-age ones, get charmed by the SMS or email promising to give superior returns. Are there any red flags which you want to highlight for traders? A) The major shift in the retail participation in the current upmove has been in heavyweights rather than penny stocks, which in a way offers a major safety net. Also, the major chunk is coming through the indirect route i.e. MFs rather than investors taking bets on direct company-specific stuff. As was the trend earlier of taking bets on so-called tips, we have seen it shift to people who do hand-holding during the process of trade. This also in a way indicates that Indian investors are maturing, slowly but surely. However, there would always be some rotten eggs here and there, but we look at it as a part of the game. Q) Top 3-5 trading ideas which traders can initiate in the coming week with a time horizon of 3-4 weeks? A) Here is a list of top stocks for the next 3-4 weeks: RIL: CMP: Rs 1,911 | Target: 1,985-2,050 | Stop loss: Rs 1,885 Aurobindo Pharma: CMP: Rs 836 | Target: Rs 950 | Stop Loss: Rs 809 Cadila Healthcare: CMP: Rs 378 | Target: Rs 420 | Stop Loss: Rs 344 Disclaimer: The views and investment tips expressed by 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.