Daily and weekly technical charts signal sustained weakness. A break below the recent swing low of 23,263 could accelerate Nifty’s momentum towards 22,800, while a close above 24,750 may trigger a short-covering rally, according to technical analysts. Maruti, Eicher Motors, Bajaj Finserv, Bajaj Finance, HCL Tech, Bata, Bharti Airtel, Infosys, and Marico have formed bullish patterns, said analysts. 117185169ARPAN SHAH SENIOR RESEARCH ANALYST, MONARCH NETWORTH CAPITALWhere is the Nifty headed this week? The benchmark index traded with negative bias and closed with a bearish candlestick formation on the weekly chart. If the index breaks below the recent swing low of 23,263, momentum will accelerate on the downside and the index will reach the 22,800 level in the coming days. Nifty may witness a shortcovering rally if it closes above the 24,750. Traders need to follow strict risk management in fresh trades. Bank Nifty has underperformed the benchmark index and closed with a fresh breakdown on the weekly chart. It is likely to underperform Nifty in coming days. What should investors do? The IT index has closed with a bullish candlestick formation and is likely to provide support to Nifty. IT index is likely to cross the recent swing high led by TCS and HCL Tech. Any dip in these stocks will be a buying opportunity. Investors can also accumulate Reliance, among large-caps, as it has started to outperform after many weeks of underperformance. Among autos, Maruti and Eicher Motors have given pullback after recent breakouts. Both these stocks can be added at current levels. Mid- and smallcaps witnessed strong selling pressure last week and closed with negative bias. Stocks like Paytm, Dixon, Kalyan Jewellers, and CDSL have closed with bearish candlestick formations and any bounce in these stocks is a short-selling opportunity.CHANDAN TAPARIA HEAD – TECHNICAL RESEARCH & DERIVATIVES, MOTILAL OSWALWhere is the Nifty headed this week? Nifty has been making lower-top lower-bottom on monthly scale and continuing its losing streak for the fourth consecutive month. The short and medium-term trends of the market have turned lower. Any bounce could be sold for a downside target towards 22,800. On the upside, a key hurdle exists at 24,000 zone. India VIX took multiple support near 13 levels in the last four weeks and spiked to 16 zones. CBOE VIX spiked around 50% last month and is now hovering near 20 zones which indicates some volatile swings with capped upside in the US market. India’s VIX remains higher, and Nifty tends to turn lower in January. Accordingly, volatile cues and swings will likely continue in the Indian market. What should investors do? Nifty IT has a positive stance while most other sectors, like banking, metal, capital goods, and energy are showing continuous signs of weakness. Stock-wise bullish setup in Bajaj Finserv, Bajaj Finance, HCL Tech, Bata India, Bharti Airtel, Infosys, and Marico. Expect weakness in AB Capital, ACC, Apollo Tyres, Axis Bank, Bandhan Bank, Canara Bank, Godrej Property, Hero Motocorp, NTPC, PVR, Siemens, Tata Power etc.NAGARAJ SHETTI SENIOR TECHNICAL RESEARCH ANALYST, HDFC SECURITIESWhere is the Nifty headed this week? The downside momentum continued for the third consecutive session on Friday, and Nifty closed lower. A reasonable negative candle was formed on the daily chart with a minor lower shadow. This pattern indicates continuation of weakness in the market. Nifty is now placed at the edge of the downside breakout of a symmetrical triangle pattern on daily chart. On weekly chart, the index formed a long bear candle after a pullback in the previous two weeks. The crucial weekly support of the intermediate up-trendline has been broken on the downside. Broader market indices are also showing a sharp negative trend. What should investors do? The underlying trend is weak. A decisive slide below the support of 23,260 could open the next lower support for Nifty at around 22,700 in the near term. Immediate resistance is at 23,750-23,800. One may continue with shorts in the market and any pullback rally could be a sell-on-rise opportunity. A move below 23,260 could be an opportunity to go for aggressive shorts. Stop loss is to be placed at 23,850. Sectors for shorts: Banking, financials, infra, realty, PSE, energy, pharma and metals. Stocks with negative bias include IndusInd Bank, Kotak Bank, REC, PFC, Shriram Fin., IOC, BPCL, IRB Infra, Natco Pharma, Auro Pharma, Hindalco, and Tata Steel
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