SUDEEP SHAH
HEAD – TECHNICAL AND DERIVATIVE RESEARCH,
SECURITIES
Where is the Nifty headed this week?
Nifty has broken down from its consolidation range and slipped below its 100-day exponential moving average (EMA) of 17,900 levels, which was being defended for the past 23 sessions. The short-term moving averages are in a falling mode, which indicates the bearish momentum could continue in the upcoming week. Crucial support for the Nifty is seen at 17,450- 17,470, and a breakdown below this zone could attract further selling pressure towards the 17,230-17,250 zone. Above 17,800 levels, the index can revisit 18,020-18,050 levels again on the upside.
What should investors do?
Traders and investors should adopt a stock-specific approach and look to add quality stocks that are currently outperforming the markets. One should prefer large-caps and quality mid-caps while staying away from smallcaps, especially the debt-ridden ones. We expect selective stocks from the auto, FMCG, and IT to outperform going ahead with positive trade-set-up visible in select names such as
, , , M&M, , , L&T, and while Stocks from the banking, cement and oil & gas sectors could continue incremental weakness.
ARPAN SHAH
SENIOR RESEARCH ANALYST,
Where is the Nifty headed this week?
Nifty, which was consolidating in the range of 17,750-18,250 on last one month, has given a fresh breakout on the downside. This breakout has opened up 500 points downsides on the index level. Nifty is likely to head towards 17,250-17,200 in the coming week, while on the upside, it may face resistance at 17,750 level. The banking index has participated strongly on the downside, and it has also broken the support level of 41,500.
What should investors do?
Traders should look to avoid high beta sectors, like real estate and metals, till next week as there will be high volatility due to Budget. The PSU Bank index has given a fresh breakdown, and stocks like SBI and can be traded on the negative side. The Nifty Auto index has given a fresh breakout on the upside, and stocks like Maruti are a good addition on the dips. `8,500 is the breakout point for Maruti, and any dip toward this level is a buying opportunity. From the midcap segment, stocks like PVR and McDowell offer good buying opportunity at the current levels.