“Now, if Nifty breaks below 18,500 level as was seen in Friday’s session, then possibly some corrective action can be expected in the coming sessions also,” says Rajesh Palviya, Axis Securities.
Bank Nifty was once again at a record high level, and especially the PSU banks played quite a major role in this rally, going forward what do you feel?
So there was a clear divergence for this week in the Nifty as well as in Bank Nifty. Nifty is down by almost around 1.10% and Bank Nifty is up by 1% for this week. Looking at the behaviour of both the indices, we have almost marked a high of around 18,800 and now Nifty is showing a bit of corrective action. In Friday’s session again we had briefly gone below 18,500 level which is a major put concentration zone and Nifty has challenged those levels.
Bank Nifty was once again at a record high level, and especially the PSU banks played quite a major role in this rally, going forward what do you feel?
So there was a clear divergence for this week in the Nifty as well as in Bank Nifty. Nifty is down by almost around 1.10% and Bank Nifty is up by 1% for this week. Looking at the behaviour of both the indices, we have almost marked a high of around 18,800 and now Nifty is showing a bit of corrective action. In Friday’s session again we had briefly gone below 18,500 level which is a major put concentration zone and Nifty has challenged those levels.
Now, if Nifty breaks below 18,500 level as was seen in Friday’s session, then possibly some corrective action can be expected in the coming sessions also. Possibly Nifty can move further lower towards its next support area of 18,250. In this corrective phase, Nifty is now trading below its 10-day moving average and is challenging its 20-day moving average, so the near term setup is suggesting that some pressure may be seen in the Nifty but on the other hand, Bank Nifty is showing a different picture.
Bank Nifty is enjoying an all-time high trajectory and looking at the overall setup for Bank Nifty, we believe that Bank Nifty can display its strength in the coming sessions. Further, most of the PSU banks are now trading above their yearly breakout levels so that is a positive sign. We believe that going forward, more action on the buying side can be witnessed in the PSU bank space. Stocks like
, , even and small banks like are showing good strength even at the higher level and buying action is there.
Hence there is a view that further momentum is likely to continue in PSU banks as well as in the private banks. Consequently, Bank Nifty can be an outperformer again in the coming week and possibly Bank Nifty can inch up higher towards 44,000 level. One can keep a stop loss on Bank Nifty at around 43,000 and hold a long position for 44,000-44,200 targets.
Next week is going to be a crucial one because we have the FOMC meet lined up and on Friday we did see markets cooling off from their highs. But for Bank Nifty it was a good week indeed. Moving forward, which should be the stocks that one should be looking out for, keeping aside the index and the performance?
So we are going with three sectors which still look positive despite the corrective action in Nifty. First is the PSU banking pack and within that the country’s leading PSU bank SBI looks very promising.
Considering the breakout in the last hour of the trade in Friday’s session, it is clearly indicated that SBI can continue its upward momentum in the coming week also. We are projecting a target of Rs 645 for . one can buy and accumulate the stock with a stop loss of 607.
Another sector which is looking promising is FMCG and from that space we like Godrej Consumer. It is showing good traction, since the last four consecutive weeks and we are seeing that higher high formation is there which is clearly indicating that sustained buying is there in the stock. Looking at the addition of the open interest front also, it is clearly showing that long built up trade has been carried forward. Hence we believe that
can move further higher from the current levels. We are projecting a target of Rs 955 and one can buy and accumulate stock with a stop loss of Rs 900.
Another sector that is looking attractive is capital goods and from that space we like L&T. We have witnessed very strong momentum throughout the week and the stock is making a series of higher top, higher bottom formation. So there is a clear uptrend in the stock and we believe that L&T will continue its upward momentum. We have a target of Rs 2250 for the coming week for L&T. Hence one can buy and accumulate the stock keeping the stop loss at Rs 2100.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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