NAGARAJ SHETTI
TECHNICAL RESEARCH ANALYST, HDFC SECURITIES
Where is the Nifty heading this week?
After showing a sustainable upside bounce on Thursday, Nifty shifted into an up-move with volatility on Friday. An identical open and close pattern was formed on Friday, which indicates a type of doji pattern at the highs. Normally, doji formations at the highs call for caution for longs. However, the formation of this pattern amidst range movement indicates consolidation movement. The short-term uptrend status of Nifty remains intact, but the market is likely to find resistance around 21,800-21,850 in the near term. A decisive move above 21,850-21,900 could only open the next target of 22,200. Any dips from here could find support around 21,500.
What should an investor do?
The near-term uptrend of the Nifty is intact, and one may remain long on the index for the near term. On any dips to 21,500-21,400, one may look to buy, and there is a higher possibility of an upside bounce from the lows. One may place a stop loss of 21,200 for trading longs. Any decisive up-move above 21,900 could give an opportunity for aggressive longs. Any break below the crucial support of 21,200 is likely to be a sign of exiting longs and creating shorts. Stocks with positive bias include Axis Bank, Canara Bank, Divi’s Lab, Cipla, Coforge, Infosys, and ITC.
RAHUL SHARMA
HEAD- TECHNICAL & DERIVATIVE, JM FINANCIAL SERVICES
Where is the Nifty headed this week?
The key positive takeaway for Nifty is that it is still holding above the major support zone of 21,450-500 on a closing basis. As long as Nifty is holding above the 21,500 level, there is no major reason for panic. The rally in Nifty is likely to continue, and it can test the crucial resistance zone of 21,800-850 on an immediate basis. Eventually, it is likely to test the next psychological resistance of 22,000. Support is at 21,650 and 21,450-21,500 levels.
What should Investors do?
Investors are advised to hold long positions with a trailing stop loss of 21,630, while profit booking is advised as we move closer to the 22,000-22,200 zone. Bullish trades can be taken in IT and capital goods. We like Infosys and L&T. GAIL can be bought with a stop loss at Rs 155 for a target of Rs 177.
APURVA SHETH
HEAD OF MARKET PERSPECTIVES & RESEARCH, SAMCO SECURITIES
Where is the Nifty headed this week?
Nifty has been consolidating in a range of 21,500 to 21,800 during the week. It has breached below the curved trendline drawn from the October low of 18,837. The daily RSI has slipped below 70 levels after trading in overbought territory for more than a month. The month of January is one of the weakest months. Nifty has closed on a negative note in 13 out of the last 20 years in January. The index can likely continue to consolidate in a trading range of 21,500 to 22,000 in the coming week. A breach below 21,500 could push the Nifty down to 21,000 levels.
What should investors do?
These days, several penny stocks with questionable fundamentals have started moving up. We recommend investors steer clear from such companies and focus on large-cap stocks, which are available at good valuations and are safe, too. Investors can go long on stocks from sectors like FMCG and pharma since they will offer protection in case the market falls. We prefer stocks like Cipla, Dr Reddy’s, Divi’s Lab, HUL and ITC.
