Market pundits suggest that the sudden change in sentiment is a defining characteristic of range-bound markets. Throughout the week, markets remained volatile.
Amit Trivedi, CMT, AVP, YES Securities, said that both Nifty and BankNifty formed multiple sizable bullish candlesticks. The quick recovery from the support zone, coupled with the improvement in the Nifty inside breadth, infers key support near the 15,800-16,000 zone.
“Next week, Nifty is likely to break its immediate hurdle again near 16,400,” he added. “If this hurdle is decisively overcome, he can unlock upside potential to the 16,550 zone.”
Nifty has lost about 13 percent from April highs due to a number of domestic and global factors, including India Inc’s mixed Q4 figures, rising inflation, crude oil prices, geopolitical concerns and rate hikes.
Sectoral trends are mixed, Trivedi said. “From an investment perspective, the ideal strategy is to remain invested in sectors that are holding strong and outperforming the benchmark,” she added.
The technical expert believes that the markets will remain volatile due to higher VIX levels. He advised traders to initiate short positions in weaker stocks during the rebound action, but with strict stop loss limits.
Despite rising close to 20 percent in 2021, the Nifty Auto Index continued to underperform in the past year. However, Trvidedi sees the index rising in the short term.
“The recent structure of select auto stocks shows relative strength, while the overall chart setup shows further upside potential,” he added. “You can accumulate Tata Motors and
for a possible 8-12 percent advantage.
The YES Securities chart has supported a few more names from a trading perspective. He said some battered stocks may show some respite.
between Rs 560-570 with a strict stop loss of 530. “The stock has recently broken out of its hurdle zone”, with a short-term rise to Rs 630 possible.
“SBI has managed to defend levels of Rs 440,” Trivedi said. “A positive follow-on action is likely to attract buying interest which, in turn, may push the shares up to the Rs500 zone.” He suggested a stop loss of Rs 440.
(Disclaimer: The recommendations, suggestions, points of view and opinions given by the experts are their own. These do not represent the views of the Economic Times)