Market is not doing anything at all. 18100 is just being held but in a very-very narrow band.
Absolutely, we need to understand what has happened in the last 15 days. Nifty has taken support at 17817-17850 at least four times in the last 15 to 18 trading sessions. Then we managed to cross above that resistance at 18030-18050 and post that in the last five days now we are sustaining about that prior resistance zone of 18050 which is now also the 20-DMA.
So now this zone of 18050-18070 will act as a crucial support for today as well as tomorrow. Tomorrow we have a monthly expiry on hands and a lot of volatility could be there because post this, next week directly we will be heading into the budget. I feel that 18050-18070 will act as a strong support. And if we just see the derivatives data also there is massive put writing happening in 18100 puts and call writing is visible in 18200 strikes.
So, all in all, I guess we are set up for a range bound but a choppy expiry. The support zones could be 18050-18070 on the downside and the resistance on the upside could be 18182-18230. Only about 18230 we could see a seamless move on the upside because we are seeing in the last few days that despite good results banking was expected to move up after such a good set of numbers in ICICI, Kotak and Axis but that also is not being able to cross 43000.
43000 on Bank Nifty now seems to be a very strong resistance. Above that we feel that there could be a very good up move and on the downside for the Bank Nifty also 42450-42500 will act as a strong support with some serious put writing happening at 42500 and 42600 strike prices.
What will be your top ideas then?
I have a couple of them from midcaps. Now first one is Polycab. If we see Polycab, in the month of December it had given a fall from 3000 to 2500. But now post good results that has been announced a few days back we have seen the stock retracing about 61% of that entire fall and in the last several sessions there is a higher bottom formation as well as the derivative data indicates some serious build-up for a long build-up.
So what we feel is that the stock could move up from here also and could outperform in the next few sessions because the results have been very good. If we see the positioning in the 2750-2800 zone is acting as a strong support now in the last few days. So till the zone of 2760- 2765 holds, the stock could move up to 2900-2925.
Another pick what I like is Carborundum Universal. What we have seen in the stock is that the stock has seen some traction in the last few days. Now the stock has been outperforming the midcaps space since last seven-eight sessions and has given a symmetrical triangle breakout on the 4th of Jan. Now there have been several retest of this breakout and every time there is a retest the volumes post that are very strong. So that is giving us confidence that the stock can move up in the next few sessions and can be bought with a 905 stop loss for a 975 to 985 target on the upside.
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