RAJESH PALVIYA HEAD TECHNICAL DERIVATIVES, AXIS SECURITIES
Where is Nifty headed? On weekly chart, the index has formed a long bearish candle with a lower high-low pattern, indicating weakness at current levels. Nifty has posted its fourth consecutive bearish candle on weekly chart. The chart suggests that if the index falls below 24,000, it may experience selling pressure and potentially move towards the 23,800-23,700 range. Conversely, if Nifty crosses and sustains above 24,350, it could gain buying momentum, pushing the index towards the 24,500- 24,750 levels. The weekly RSI is moving downward and is positioned below its reference line, indicating a negative bias. What should investors do? Near-term indicators are in oversold position, suggesting that we might witness some short covering. However, until the Nifty crosses above 24,500, the recommended strategy would be to sell on any rise. Most sector indices have broken through important support levels on near-term chart, with very few, such as pharma and IT, managing to hold their ground. Some selective stocks like Lupin, Divi’s Lab, Coforge, HCL Tech, and National Aluminum may exhibit some bullishness if market stabilises. In contrast, stocks like Dabur, Indraprastha Gas, Apollo Tyres, and Bandhan Bank are likely to show more weakness in the near term.SUDEEP SHAH HEAD – TECHNICAL & DERIVATIVES RESEARCH, SBI SECURITIESWhere is Nifty headed? An interesting observation over 20 trading sessions is that the index has frequently opened with a gap-up, followed by a decline throughout the day. This trend signals a notable shift in market sentiment from a ‘buy on dips’ to a ‘sell on rise’ approach, indicating a more cautious outlook. Currently, Nifty is comfortable trading below its 100-day EMA and the daily RSI is quoting below 30 and it is in a falling mode. These indicate the index is likely to continue its southward journey. The zone of 24,400- 24,450 will act as an immediate hurdle for the index. While, on the downside, 23,800- 23,700 will act as crucial support for the index as a prior swing low is placed in that region. Any sustainable move below the level of 23,700 will lead to a sharp correction up to the 200-day EMA level, which is currently quoting at 23,455. What should Investors do? Despite Nifty’s shortterm negative bias and broad market selloff, this phase presents a strong opportunity for long-term investors to accumulate quality largecap stocks at attractive prices. Large-cap stocks such as HCL Tech, Bharti Airtel, and HDFC Bank can be bought on dips; while select midcap stocks such as CDSL, Coforge and Thermax are expected to display outperformance in the coming week.
SAMEET CHAVAN HEAD RESEARCH – TECHNICAL AND DERIVATIVES, ANGEL ONE
Where is Nifty headed? While the daily chart may not fully capture the depth of this move, the weekly and monthly charts have shown signifi cant distortion, suggesting potential corrections, followed by a possible time correction. Key support levels now include the August lows near 23,900, with additional retracement and 200- SMA support at 23,750 and 23,400, respectively. These levels may seem far off, but it’s critical to reassess at each level due to the unpredictable nature of this decline. Oscillators continue to slide lower, with the RSI smoothened reaching around 20, historically a key support level, and the hourly time frame indicating deep oversold conditions — potentially allowing for an inbetween relief bounce.
What could investors do? CARE Rating has been bucking the trend. Looking at the robust volumes, we recommend buying on declines around Rs 1,350–1,300 for a medium-term target of Rs 1,680. The stop loss is to be placed at Rs 1,138. On the other hand, PSUs are feeling the heat. Coal India has traversed below its 200-day simple moving average level for the first time after nearly 15 months. Momentum traders can short for a target of Rs 438, with stop loss at Rs 480.40.
