"The banking sector might provide some impetus for the market to rise further. However, for the upcoming week, we can expect a range-bound movement with potential lows reaching down to 22,760 as the lower boundary and highs potentially capping at 23,200 as the upper limit for Nifty," explains Rajesh Palviya from Axis Securities.
What do you reckon our opening might look like on Monday considering the type of drop we witnessed today? Is it possible that we've fully processed this tariff information, which means Monday could present a more positive outlook for us since yesterday we handled the shock rather calmly and today we got rattled. Therefore, should we anticipate that this was solely due to international market performance making Monday potentially brighter for us, or do you feel this signals the beginning of yet another corrective phase that may continue moving forward? Rajesh Palviya: Therefore, undoubtedly, global influences will affect the Monday opening. Considering the current setup, the weekly closing value of Nifty has dropped beneath both the 20-day and 50-day moving averages. However, on the contrary, Bank Nifty presents a distinct situation since it remains steady and stays above multiple moving averages including those representing short-term, medium-term, and long-term trends. This indicates robustness within this sector.
However, on the flip side, Nifty has surrendered all its gains and breached the crucial support zone. Therefore, for Monday, 22,760 becomes the key level for Nifty. If it breaches these levels, we might witness an extension of this downward trend, with potential continued selling pressure heading toward 22,500 in the following week.
However, at 22,760, if we manage to hang on, we might observe some retracement activity in the upcoming days. During this retracement, 23,100 and 23,200 could serve as key resistance zones for now since they represent significant supply levels within the short-term framework.
When examining the larger market, only a handful of sectors exhibit resilience from a technical standpoint. The banking sector, including non-banking financial companies (NBFCs), as well as consumer goods firms in the FMCG industry, show some robustness. Additionally, certain cement stocks are demonstrating similar strength. However, clear leadership across the board remains lacking.
The banking sector might provide enough backing for the market to continue climbing. Therefore, for the upcoming week, we can expect a trading range with 22,760 as the lower boundary and 23,200 as the upper limit for Nifty.
You pointed out that Nifty Bank might drive the overall market performance. Indeed, during today’s trading session, observe how Nifty Bank performed; it remained quite robust despite everything else. Although we finished slightly down, Nifty Bank held steady much better than the broader market indices. Now, following this phase of consolidation, do you believe that banks could spearhead the subsequent upward movement? Additionally, which specific levels should be monitored closely within Nifty Bank? Rajesh Palviya: Certainly! Yes, Bank Nifty appears quite promising, and I think that when it surpasses 51,700, we might witness an upward movement extending towards 52,000 to 52,200. Given that Bank Nifty remains steady above its 200-day moving average, many major private sector banks show strong signs of accumulation. Additionally, public sector banks have exhibited robust momentum throughout this week. Therefore, Bank Nifty seems likely to bolster the overall market performance, with a suggested protective stop-loss positioned near the 51,000 mark. If current levels hold firm, reaching up to 52,200 within the upcoming week is plausible.
What positions have you taken? Which stocks are you betting against? Are you considering shorting Nifty IT? It seems like there could still be more downside for this sector. Remember how NASDAQ faced tough times yesterday, and NIFTY IT has been struggling due to reduced demand from the U.S. market as well as diminishing support from a weakening dollar. Would you consider going short on Nifty IT, and what sectors are you bullish about? Rajesh Palviya: Therefore, certainly stay away from IT-related investments and consider maintaining a cautious position when trading both Nifty IT and major large-cap IT stocks. Upon examining the broader picture, Nifty IT remains significantly beneath the 200-day moving average, with many leading IT companies having breached their monthly support levels.
Therefore, we might observe additional vulnerability in Nifty IT, and similarly, I concur with Mr. Bagga’s perspective on the metals sector, where weaknesses persist.
Therefore, both of these sectors seem to be in the bearish phase, and we might witness further declines in them. Hence, I believe that shares from these sectors should be avoided. Instead, one could consider taking long positions in the banking sector along with NBFCs. Both areas appear promising, particularly within banking where large-cap banks are seeming quite appealing.
Therefore, among private sector banks like ICICI Bank, HDFC Bank, and Kotak Bank, several appear appealing. Additionally, the FMCG segment shows promise; however, only certain selected FMCG stocks are performing well. Thus, a few specific FMCG shares could be considered for short-term trades. Furthermore, the cement industry presents another area with potential opportunities since this sector has demonstrated resilience over the past week.
Therefore, the cement industry might experience an uptick in the upcoming week. Consequently, these three areas appear promising from a trading perspective, particularly for long positions.
Specific stock choices, currently there are two buy recommendations that I find appealing. Rajesh Palviya: Therefore, the first one is IndiGo, whose stock price is nearly at an all-time high level. Given how well the stock is performing amidst this volatile market, we might see a potential target of around 5280. Hence, investors could consider buying InterGlobe Aviation with a stop loss set at 5,000. On the flip side, IT appears weak once more; thus, HCL Tech seems like a viable option for a short position in the upcoming week. We anticipate a downward target of about 1380 with a stop loss positioned at 1455.