Last week, we talked about the possibility of a sharp pullback after staying at the 200 DMA level for a while, and that’s what we’ve seen. Historically, when a sharp pullback occurs, indices tend to stay at higher levels for a few more days. Do you think this will happen again?
After nearly 10 days below the 200-day moving average, Nifty is now back above the 200-day moving average, so this is a positive development in the first week of this new year. Although the Nifty still failed to maintain above 24,000 on a weekly closing basis, given the broader market recovery over the last two days, it clearly signals that some confidence is returning to the street as we have crossed 23,800. Now trading near the 24,000 level.
We believe that if Nifty manages to cross 24,000, 24,050 levels again in the coming week, the bullish potential may extend and we may see 24,200, 24,250 levels continuing with this pullback. So, at this point, we hold our long position with a stop loss of 24,800, which is an important level to watch on Nifty.
On Bank Nifty, it is still strengthening in the range. Bank Nifty ranges between 50,400 and high side 51,700. This is the broad range we have seen for the Bank Nifty over the past few days. Any breakout above 51,500 may attract short covering action and then the rally may extend to 52,000, 52,500 zone, but still 50-day, 100-day moving average is acting as a supply zone for Bank Nifty, which is 51,600, 51,700. has been placed on. cluster
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So, these levels need to be taken out by Bank Nifty on weekly closing basis, then buying action or short covering action needs to follow which we can see in Bank Nifty as well. On the downside, an important support area for Bank Nifty is placed at 50,500, 50,600 zone, which is an important level. So, at this time, some banking stocks are doing well but still if we look at the entire basket of banking stocks, they show a different behavior. So, we believe that Bank Nifty may remain in consolidation but on Nifty, we have a bullish view and we believe that next week may see 24,200 to 24,250 level on Nifty.
In terms of consumption, which segment will lead you in view of increasing competition – retail or fast-paced commerce? What is your opinion on this?
In the current week, we have seen traction in both baskets. We have seen good buying in most consumption related stocks as well as new age companies. So, given the current situation on the technical front, we can see some more recovery in the FMCG basket after this significant correction. But new age stocks like D-Mart, Zomato, PolicyBazaar, all these stocks have seen very strong buying in the last two days. And the way these stocks are based, there will be outperformance, but the FMCG basket is also seeing some buying interest. So, stocks like Dabur, Merico, Tata Consumer, Bata India, all these stocks can be seen to move up in near term to short term.
Please share your specific recommendation and quick view on January season. Historically, January is a weak month, but despite weak FII and rollover numbers, the market has surprised us with a positive start. What is your stance on this?
Behavior changes. Seasonality data for the month of December was quite positive, but we haven’t seen that kind of data for reality this December and January, again, seasonality shows that it has a 50-50% chance. But looking at the first two days of this market I think it clearly shows that after a strong correction there is a possibility of recovery in the month of January because we are going to have a big event budget after the month of January. Therefore, we are positive for the month of January and we believe that the momentum may continue on the bullish side.
Think stock. The first is from automobiles, namely Eicher Motor, a very strong breakout on the weekly chart, with the stock trading near near all-time highs. Given the way the stock managed to breakout, we believe Eicher Motor can extend its gains. 5450 is our next target for the stock, so one can buy and accumulate with a stop loss of 5220.
Another stock we like is Bata India. This stock has also seen very strong buying action throughout the week and as the stock is now approaching its multiple supply zone, we believe that Bata India may manage to breakout from this supply zone and then possibly 1500 to 1510. can extend up to Bata India can be viewed as a buy for next week and keep your stop loss at 1430.
And the third stock belongs to the oil and gas sector i.e. IGL. If we look at the weekly chart, the share managed to give a breakout on the descending channel. There was a long build-up. The stock is moving in an up-sloping channel on the daily chart. Given the overall structure, we believe IGL can extend its gains, with a possible target towards 458 as we see it next week. So, IGL can be considered for buying with a stop loss of 430.
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