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Stocks such as Axis Bank, SBI, Tata Motors, Sun Pharma, Canara Bank, PFC, DLF, Godrej Properties, PI Industries, Aurobindo Pharma, and Dr Lal Path Labs have exhibited bullish trend on the charts, as per the analysts.
DHARMESH SHAH
HEAD-TECHNICALS, ICICI SECURITIES
Where is Nifty headed this week?
The weekly price action formed a bull candle carrying a positive gap below it, indicating a continuation of upward momentum. In this truncated week, we expect the index to trade with a positive bias and reach an immediate milestone of 19,700 in a few weeks. Our positive bias is further validated by the formation of a higher high-low in Bank Nifty after seven consecutive weeks of decline, confirming the uptrend’s resumption. The improvement of market breadth signifies broader market participation. The breach of the October-low in Brent crude would provide impetus to the equity market, while cool off in global and domestic yields would be a key catalyst for accelerating the move.
What should investors do?
We believe the recent healthy retracement has paved the way for the next leg of the upmove. Sectorally, we remain positive on BFSI, auto, infra, and PSU stocks. Among the large-caps, we prefer Axis Bank, SBI, Tata Motors, Sun Pharma, GAIL, and NTPC; while among the midcap stocks, Canara Bank, PFC, TCI, Sonata Software, HAL, NMDC, Spandana Sphoorty are looking good.
RAJESH PALVIYA
HEAD TECHNICAL DERIVATIVES, AXIS SECURITIES
Where is Nifty headed this week?
On the weekly chart, the index has formed a small bullish candle with a higher high-low formation, indicating sustained buying. The chart pattern suggests that if Nifty crosses and sustains above the 19,500 level, it would witness buying, leading the index towards 19,600-19,800 levels. However, if the index breaks below the 19,300 level, it would witness selling, taking the index towards 19,200-19,000.
What should investors do?
We expect stocks like DLF, Godrej Property, PI Industries, Chambal Fertiliser, HAL, BEL, Canara Bank, PNB, Aurobindo Pharma, Dr Lal Path Labs, and Vedanta may show bullishness in the near term. Traders can initiate a Call Ladder strategy for the weekly expiry, which involves buying one lot of Nifty 19,400 Call at Rs 161 and selling one lot of 19,600 Call at Rs 67 and one lot of 19,800 Call at Rs 22. The cost of the strategy involves an outflow of Rs 3,600, which is the maximum loss if Nifty trades and closes below 19,475 levels on expiry. On expiry, the maximum profit of Rs 6,400 will be attained if Nifty closes above 19,600 levels, while the strategy will start making a loss if Nifty crosses 19,900. Hence, it’s advisable to exit the strategy to avoid unlimited losses above 19,850- 19,900. The break-even points are 19,928 on the upside and 19,472 on the downside.
PRITESH MEHTA
ANALYST, YES SECURITIES
Where is Nifty headed this week?
After retracing 61.8% of the previous down move, momentum on the upside seems to have stalled as Nifty has failed to surpass 19,500. The hurdle of 100-DMA, recent indecisive candles, shows a lack of momentum. Yet, the downside seems limited; moving above 19,500 would result in a move towards the midpoint of the current three-digit Gann channel, 197(00). The ratio of Bank Nifty vs Nifty has rebounded off support. We believe this reversal in the ratio would provide short-term outperformance in banks.
What should investors do?
Seasonality study of Midcap 100 and Smallcap 100 indices for the last 10 years suggests that the last quarter of the calendar year tends to provide positive returns at an average of 8-9%. So, action will prevail beyond the benchmark index for the next few weeks. Our customised Hospitals and Diagnostics index has bounced off extended trendline support drawn off the September 2021 peak, implying strength. Dr Lal Path Labs and Metropolis Labs are expected to stage 10%- plus rally.
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