June 22, 2024

Vinay Rajani, CMT, is the senior technical and spinoff analyst at HDFC Securities

“GSFC and MOIL have bullish setups on the quick to medium time period charts,” Vinay Rajani, CMT, senior technical and spinoff analyst at HDFC Securities, in an interview with Moneycontrol.

Contemplating the pattern and the sort of resilience proven by these shares, he believes that each GSFC and MOIL would generate wholesome alpha from right here for positional merchants earlier than and after the price range.

Story continues beneath Commercial

On the Financial institution Nifty, which corrected for a fourth consecutive week, the monetary market skilled with greater than 16 years of expertise feels that the autumn in Financial institution Nifty from right here could be restricted as a lot of the negatives have been discounted within the worth just lately.

Contemplating the consolidation round 200-day EMA, do you assume the Financial institution Nifty is over with the correction? Or do you see the index breaking October lows within the coming days?

For the final two buying and selling classes, Financial institution Nifty has been discovering help on its 200 DEMA (day exponential shifting common), which is presently positioned at 44,568. Financial institution Nifty has already witnessed a wholesome correction of greater than 4,200 factors from the all-time excessive of 48,636 registered in December 2023. 200 DEMA at all times has excessive significance as help when benchmark indices attain close to it after a wholesome correction.

Beneath 200 DEMA, we see robust help coming within the vary of 43,800-44,000, derived from the upward sloping pattern line, which adjoins the weekly low of March 17, 2023 and October 27, 2023. The latest fall in Financial institution Nifty is extra sector-specific and there’s no across-the-board weak spot in different sectors.

Additionally learn: Momentum mania: 12 new midcap shares entered the Nifty 200 Momentum 30 Index

The breadth of the market could be very robust and that’s why we really feel that the autumn in Financial institution Nifty from right here could be restricted as a lot of the negatives have been discounted within the worth just lately. The utmost draw back may very well be as much as 43,800 odd ranges in case the index breaks 200 DEMA help.

Story continues beneath Commercial

October 2023 backside is positioned at 42,105 and we see much less chance of that taking place within the coming days.

Are the charts telling you that the Nifty 50 will break the 20,500 mark within the coming weeks, earlier than resuming one other leg of up transfer?

No. If correction have been to proceed, we see Nifty discovering help within the zone of 20,800-20,900, derived from upward sloping trendline adjoining the weekly highs of July 21, 2023 and September 15, 2023. There’s a big unfilled hole within the vary of 20,507-20,291.

Within the bear case situation, Nifty is anticipated to seek out help on this hole zone. Any degree above 21,600 would negate the latest downtrend. The very best a part of in Indian market is the robust breadth, which provides us the boldness that the draw back could be restricted in benchmark indices from the present ranges.

Additionally learn: Finances and Markets: Will the PSU rally proceed post-budget?

Has the Zee Leisure Enterprises bottomed out after extreme correction?

No. Zee Leisure has nosedived greater than 40 % month thus far. The inventory has breached the earlier swing low of Rs 170 on the long-term charts. It has additionally confirmed the bearish Head and Shoulder sample on the month-to-month chart. So positionally inventory appears to be like weak.

Nevertheless, we can’t rule out the potential of a pullback rally after such a steep fall in a brief interval. We see robust resistance between Rs 175 and Rs 180 within the inventory.

That are your high two price range picks, and why?

GSFC (Gujarat State Fertilizers & Chemical compounds) and MOIL

Fertiliser, mining and PSU sectors have been outperforming and the identical is anticipated to proceed from right here. Each shares have bullish setups on the quick to medium-term charts. Contemplating the pattern and the sort of resilience proven by these shares, we imagine that each GSFC and MOIL would generate wholesome alpha from right here for positional merchants earlier than and after the price range.

RITES was the largest gainer within the Nifty 500 index. Do you see the inventory extending its upward transfer within the coming weeks too?

In technical evaluation, we are saying the pattern is your buddy. If a inventory is resilient and is into bullish momentum, merchants ought to at all times be with it. It doesn’t matter what the reason being, railway shares have been displaying a large amount of power on the charts.

The inventory can stay overbought for an extended interval except the worth breaks the help. At current inventory is at its all-time excessive and the pattern is anticipated to stay bullish within the coming days. The sample goal for the inventory is available in at Rs 730 odd ranges, the place merchants can consider reserving earnings or elevating stop-loss.

KPIT Applied sciences appears to have decisively damaged the consolidation on the draw back. Do you see the inventory falling in direction of 200-day EMA as soon as?

The inventory has damaged down beneath the final 10 week’s worth consolidation with a leap in volumes. In historical past, we noticed this inventory discovering help close to its 100 DEMA a number of instances, which is presently positioned at Rs 1,350 odd ranges. The sustainable degree beneath Rs 1,350 may drag the inventory in direction of its 200 DEMA, positioned at Rs 1,212 odd ranges.

Do you assume Nifty IT will consolidate within the coming weeks by taking help at round 35,500-36,000 space?

IT Index is all set to register a brand new all-time excessive above 39,447. At current, the Nifty IT index is down 7.5 % from its all-time excessive. That is the one acknowledged sectoral Index which has did not register a brand new all-time excessive within the bullish rally that began in April 2023.

Lately we noticed bullish momentum coming again to the IT index. So sure, there may be good help within the zone of 35,500-36,000 within the Nifty IT index and the identical must be utilized to create recent lengthy positions in IT shares.

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