VIKAS JAIN
SENIOR TECHNICAL & DERIVATIVE ANALYST, RELIANCE SECURITIES
Where is the Nifty headed this week?
The US markets have bounced back by 10% from their 52-week lows. The dollar index declined to the sub-110 level from the high of 114 levels, receding concerns and improving positive sentiments from the global equity markets perspective. The Nifty is up by 4% in October, and the double bottom near 16,900 levels gives a higher target of 18,100 levels. The crossover of this level would extend to a test near an all-time high of 18,600. The immediate band of 17,500-17,600 could act as a strong support, and the trend reversal is at 17,400 from current levels.
What should investors do?
We expect the high beta sectors like metals, realty, power, and high-quality mid-caps and small-caps to outperform current levels. The small-cap index is on the verge of the 200-day average breakout and could see sharp outperformance as it is still trading 20% away from its 52-week high. Among stocks, we like DLF,
, , Ashok Leyland, , and General Insurance, as the setup remains positive on its weekly structures.
MEHUL KOTHARI
AVP-TECHNICAL RESEARCH, ANAND RATHI INVESTMENT SERVICES
Where is the Nifty headed this week?
The Nifty is hovering near the 17,800 mark, which is the 78.6% Fibonacci retracement of the entire fall from 18,100 to 16,750. The zone of 17,800-18,100 has been a decisive one for many months, and the markets have been facing supply near this zone. Foreign portfolio investors’ net longs in index futures and their long-short ratio indicate room for downside, and the trigger could be 17,650. A breach might bring in profit booking in the markets. On the upside, we would advise traders to ignore the 200-300 points in the Nifty and wait for a clear close above the 18,100 mark. A close above this level would be a mere formality to breach an alltime high. The Nifty Bank might confirm a strong buy signal above the 41,900 mark on a closing basis, and on the downside, 39,900 might be strong support.
What should investors do?
Buy Syngene near Rs 610 for a target of Rs 645 with a stop loss of Rs 590. On the daily scale, we are witnessing a trend line breakout above Rs 605. The other stock one can buy is Sterling Tools, near Rs 236 for a target of Rs 260 with a stop loss of Rs 224. For the last three months, it has been trading in a band of Rs 208-238. The last session confirmed a range breakout above Rs 238.
ARPAN SHAH
SENIOR RESEARCH ANALYST,
Where is the Nifty headed this week?
The index will likely trade with positive bias this week, although we may witness some volatility as there will be important meetings of the US and Indian central banks. Technically, 17,800- 17,850 is a strong supply zone, and once it breaks this level, the Nifty can head to 18,100-18,500 levels. The Bank Nifty underperformed on Friday. A dip in the index is a buying opportunity as it will likely break above its all-time high level of 41,840 in the coming days.
What should investors do?
Reliance has given a strong reversal formation. Any dip toward the Rs 2,500 level is a buying opportunity in the stock. PSU banks are trading with strong momentum from the banking sector, and any fall in the stocks like SBI and
is a good buying opportunity. Mahindra & Mahindra and Cummins have given fresh breakouts on the weekly charts and are the top picks from the auto and capital goods sectors, respectively. Both these stocks are heading for the Rs 1,400 level in the coming days.