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SUDEEP SHAH
HEAD – TECHNICAL AND DERIVATIVES RESEARCH DESK, SBI SECURITIES
Where is the Nifty headed this week?
The volatility index, India VIX, fell to 13.4 indicating that jitters are gradually easing and thus providing comfort to the bulls. Chart patterns suggest that the 13-exponential moving average zone of 18,200-18,250 will be strong support. Until the index is maintained above 18,200, we can witness a continuation of growth up to 18,750-18,800, and the trend of ‘buying on the dips’ remains. However, if the index falls below 18,200, the weakness could continue up to 17,950-17,980. Options data points to a wider trading range of 18,200-18,780 for the week.
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. We should prefer large and mid-caps and avoid small-caps, especially those with debt. Based on chart reversal and setup analysis, we expect stocks from banking, IT, oil & gas and metals sectors to outperform with positive trading setups visible in select large-cap names such as HDFC Bank, Tata Motors, ACC, Reliance, HCL Tech & Infosys. On the mid-cap front, stocks like
, Cummins, , UPL, and could continue to witness strong buying interest
ARPAN SHAH
TECHNICAL ANALYST,
Where is the Nifty headed?
The index reached an all-time high and is consolidating near this level. Historically, December has produced positive returns over the years, so traders can expect the bullish momentum to continue in the coming weeks. The index is heading towards the 18,800-19,000 level in the coming weeks, while it has strong support at the 18,300 level. The Bank Nifty is trading at an all-time high and PSU banks have participated strongly in this upward momentum. Going forward, PSU banking stocks are likely to trade in a limited range following this sharp rally, while heavyweight HDFC Band may witness a sharp rally.
What should investors do?
The IT index gave a new breakout from the consolidation range of 26,200-30,200 levels, and the first upside target for this breakout was set at the 34,200 level. Any dip in IT stocks is a strong buying opportunity. Infosys, Persistent and Saxsort are the top picks among large, mid and small caps. ACC, from the cement sector, has started a new upward momentum, moving towards 2,700-2,800 levels in the coming days. From the real estate sector, DLF is facing a strong supply zone near the 410 level since the last few weeks and once it clears this level, it may head towards the 520 level in the coming months.
DHARMESH SHAH
TECHNICAL ANALYST,
Where is the index headed this week?
We reiterate our positive view that the Nifty is challenging an all-time high and gradually heading towards 18,900 in the coming month. Nifty makes higher high after breaking out of one-year trading range. The India VIX corrected another 10% this week, continuing its downtrend and highlighting the low risk perception among market participants. The dollar index continued a lower high and low pattern after breaking a multi-month rising channel, indicating a positive reversal for stocks. Therefore, a ‘buy on dips’ strategy should be adopted as we do not expect the index to break the key support of 18,100.
What should investors do?
We expect midcaps to do relatively better in the coming month and witness catch-up activity as it approaches price maturity and timing correction. Therefore, a temporary breather should be capitalized to accumulate quality midcaps. In stocks, Reliance Industries, HDFC Bank, Larsen & Toubro, Tata Motors and HCL Tech look good for 5-7% gains; while in the middle capital,
, RailTel, Coforge, , , look good for 8-10% increase. Sector-wise, BFSI, IT, Telecom, PSU and Infrastructure are the preferred sectors
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