ARPAN SHAH, SENIOR RESEARCH ANALYST, MONARCH NETWORTH CAPITAL
Where is the Nifty headed this week?
Nifty has rallied from 18,850 to 21,593 in the last two months. After this 2,700-point rally, the index closed with a indecisive candlestick last week. FII index longs have reached 65.5% level, which is near the upper range. Nifty is likely to trade volatile in the 20,950-21,600 range in the coming weeks. If it gives a breakout from this range, then it will have a directional move towards 20,500-20,300 level on the downside, while a breakout above 21,600 will take it to a new all-time high of 22,000-22,200.
What should investors do?
Gold is trading near an all-time high level, and stocks like Manappuram Finance will have a positive impact. Any dip in the stock is a buying opportunity for the upside target of `200-220. Bajaj Finance closed with negative formation, and it is likely to go lower towards `7,000 in the coming days. Maruti has closed with a bullish candlestick, while M&M has closed with a negative formation. A long Maruti and short M&M trade can be taken in these stocks. Hindustan Copper has given a fresh breakout on the weekly chart, and any dip towards `200 is a buying opportunity. Stocks like RHI Magnesita, West Cost Paper Mills, Ratnamani Metals, and Landmark can be added in dips.
DHARMESH SHAH, HEAD-TECHNICALS, ICICI SECURITIES
Where is the Nifty headed this week?
The weekly price action has formed a small bear candle, indicating a pause after seven consecutive weeks of rally. In the upcoming truncated week, we expect Nifty to consolidate with a positive bias in the broader range of 21,600-20,800 amid stock-specific actions. We expect the index to gradually head towards 22,000 in January 2024. In the process, strong support is placed at 20,800 due to a breather after a faster pace of retracement in Bank Nifty, declining yields, and a stable currency, along with solid institutional flows, which would act as tailwinds.
What should investors do?
Going ahead, bouts of volatility, owing to global developments and monthly expiry week, can’t be ruled out. Hence, dips should not be construed as unfavourable; instead, they should be capitalised as incremental buying opportunities in quality stocks. Among sectors, we remain positive on financials, capital goods and infra, PSU, metal, and energy, while IT provides a favourable risk-reward setup. On the stock front, in large-cap, we prefer Reliance, SBI, TCS, GAIL, Hindalco, and PNB; while in midcaps, Arvind Fashion, Hind Oil Exploration, Graphite, Engineers India, Bank of India, CESC, BEML, Auro Pharma, Birla Soft, Chambal Fertiliser, Elgi Equipment, HFCL, Vguard, are looking good.
SUDEEP SHAH, HEAD – TECHNICAL & DERIVATIVE RESEARCH DESK, SBI SECURITIES
Where is the Nifty headed this week?
Technically, we feel 21,050-21,100 could act as an important support area. Meanwhile, resistance on the upside is seen at the 21,400-21,430 zone. A decisive move above 21,430 levels could lead to a fresh upside up to 21,650-21,700. Based on option chain data, going into the expiry week, Nifty is expected to trade in a broader range of 21,050-21,650.
What Should Investors do?
The rise in India’s VIX above 13.5 levels is indicating the expansion of volatility. Hence, we feel traders and investors should adopt a stock-specific approach and focus on largecap stocks and quality midcaps, which are currently outperforming the market. We expect select stocks from the CPSE, power, realty, midcap IT, pharma, oil & gas as well as FMCG space to outperform going ahead with positive trade set-ups visible in select large-cap names such as L&T, Reliance, HDFC Bank. On the mid-cap front, stocks like Persistent, Mphasis, Cummins, Lalpath Labs, Bank of Baroda, HDFC AMC, DLF, Tata Consumer and Hindalco could continue to witness strong buying interest.