“With regards to Nifty50 index, there is a double top formation at 18100 mark and that has played well. Due to heavy selloff the index has also breached support of 17450 and has closed below the same,” says Mehul Kothari – AVP – Technical Research, Anand Rathi Shares & Stock Brokers.
In an interview with ETMarkets, Kothari said: “We are of the opinion that we could witness further fall in the index towards 38,500 – 38,000 mark in the coming week. The view would be negated only above 40500 mark” Edited excerpts:
Sensex, and Nifty50 witnessed over 1% fall amid uncertainty around the US Fed. What led to the price action?
It is said that ‘A come back is always stronger ‘and the domestic markets literally felt that as the week went by. The bears made a massive comeback in the markets after the first couple of sessions of the week.
Initially, the Nifty50 regained the 17900 mark but from there heavy selloff forced the index to retest 17300 and close near the same. The sentiment was dented after the US FED meet and the sharp depreciation of INR vs. Us Dollar.
The pair USDINR sneaked above 81 levels and that triggered a selloff in banking stocks.
Where do you see Nifty50 headed in the coming week which is also an expiry week? Important levels which one should watch out for?
With regards to the Nifty50 index; there is a double top formation at the 18100 mark and that has played well. Due to the heavy selloff the index has also breached support of 17450 and has closed below the same.
Thus, we maintain our stance that the ongoing pessimism might drag the index towards the recent low of 17,166, and that would be decider whether this is just a minor correction or the beginning of a fresh fall in markets.
There is a possibility of some bounce in Nifty after a such sell-off but on the upside; 17,750 would be a strong hurdle for the coming week.
Going ahead for Nifty Bank index; along with the negative divergence in daily RSI we are witnessing a fresh breakdown in the indicator. In addition, there is a trend line breakdown on the daily chart along with a break of the previous swing low of 40200.
Thus, we are of the opinion that we could witness a further fall in the index towards the 38500 – 38000 mark in the coming week. The view would be negated only above the 40500 mark.
The rupee tumbled to a fresh low – where do you see currency headed in the near term? Do you see further weakness?
The pair USD-INR was consolidating below 80 level for over two months then finally it has confirmed a breakout. It seems that we might witness follow-up of this breakout in the coming week also.
In such case, there is a possibility of 82 – 83 levels. The pair might cool off only below 80 mark.
The dollar index hit a fresh 20-year high above 111. Do you see this could turn out to be a worrying sign for Indian markets? What does history suggest?
Of course, the rise in the US Dollar Index can be worrisome for the emerging markets and the price action indicates some more upside from here on.
However, the monthly chart of the dollar index indicates that the RSI is approaching the hurdle of 80 levels and historically the index tends to cool off from this level of RSI.
Hence, we are wishful that this time too, the index might respect this technical evidence.
Sectorally, FMCG stocks outperformed while realty stocks suffered the most. What led to the price action, and do you see a similar trend in the expiry week?
It is natural that when the times are volatile; participation increases in defensive packs like FMCG. However, this time along with this trading psychology we have one leader who is dominating this pack and that is
.
We have been constantly upbeat about ITC since the 210 level and we continue to remain bullish on the stock for the coming months too.
Any 3-4 stocks recommendations for the October series?
Here is a list of recommendations –
: Buy near Rs73| LTP Rs 75| Target Rs 80| Stop Loss Rs 69| Upside 6%
We are witnessing a fresh range breakout in JMFINANCIL and the price action is accompanied by rising volumes.
The stock has managed to close above its 200-day moving average. The daily RSI (14) has confirmed a range shift. Thus we advise traders to buy the stock on dips near 73 for an upside target of 80 in the coming week.
: Buy above Rs 765| LTP Rs 732| Target Rs 830|Stop Loss Rs 730| Upside 13%
On 09th Sept 2022; NAZARA underwent a sharp breakout above 730 mark and that was along with heavy volumes. Then after we saw that the stock consolidated near its 200 DEMA.
At this juncture, the stock is on the verge of another breakout and the previous larger breakout too is intact. Thus we advise traders to buy the stock only above 765 for an upside target of 830 in the coming weeks.
(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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