From a technical point of view, the structure of the index is considerably weakened. Nifty moved on the daily graph since May within an “rising channel” pattern. However, the breakdown under the lower trend line this week confirms a bearish reversal. In particular, this movement was accompanied by a bearish gap, classified as a “separated gap”, which gives extra weight to the negative prospects. Moreover, the index slid under its 50-day EMA, a critical level of support that has been held so far.
With this Rahul Ghose, founder and CEO of Octanom Tech and Hedged. In, interaction with ET markets with regard to the prospects for Nifty and Bank Nifty for the coming week. The following are the edited fragments from his chat:
Let’s start with your view of the market. How do you see the market nowadays?
The Indian stock market seems somewhat nervous at the moment. We have seen both the Nifty and Sesex fall quite sharp, although the mood now feels careful, the disadvantage of here from here will be. Much of the promotion is specific to individual shares and sectors, especially when companies announce their quarterly income. But although the Nifty has made a series of lower highlights and lows lately, everything is not lost, the disadvantage is very limited and the benefit is more open.
Some may look at the fact that we are about to close the month of July with a dark cloud color candlestick pattern just around the earlier resistance. This is a warning sign for bulls from a potential further disadvantage. Our earlier view of Nifty may be a record high before Diwali is still intact, because we think this pattern will be denied in August, September.
How has the profit season been like so far? Does it seem like it will only push the market down?
The income for this quarter have been reasonably good in total, with large companies managing solid profit growth. But the reaction on the street is mixed – some heavyweight disappointments have hurt the total sentiment, even if different companies placed strong figures. So, while the income did not drag the market down on its own, moderate screenings of big names give things down.
Does there look like a head and shoulder-like pattern on the daily graph?
Many traders are talking about the possibility that a head and shoulder pattern appear on the handy charts. We are not there yet – a clear breakdown under 24600 would only confirm it. For now I would call the setup ‘one to keep a close eye on’. The next few sessions can be the key.
What is the opinion about Nifty Bank now?
Bank Nifty has been relatively stronger, but still sees some selling. If it succeeds in keeping above 56,000-57,000 zone, a rebound can be expected. For the time being I am holding a neutral attitude, but will activate a good up -to -date potential if Nifty closes above 25,200, looking to see how the income for the large lenders come true.
In general, bank Nifty graphs are better than the handy index.
Are there trade strategies for the coming week?
This is a good market to be agile and disciplined. I would concentrate on pre -defined support and resistance levels, avoid haunting Momentum and search for transactions around profit events. Stock selection is now really important, and strict stop-losses are vital given the peaks in volatility.
How does Bajaj Finance ensure the Q1 results?
The first quarter of Bajaj Finance was strong; The profit and income had risen sharply. That said, the stock responded negatively, especially since the beam was set so high and the broader market mood is nervous. I would look for opportunities to add further dips, especially if the quality of the assets remains robust.
Another interesting advantage is now IEX. What would your opinion be about IEX after the entire market coupling scenario?
IEX is currently the dominant platform for the discovery of electricity room prize in India. Under the new framework, other stock markets, including Hindustan Power Exchange, will also participate in market coupling activities. This is expected to dilute the influence of IEX in the price discovery process and create fair market dynamics.
It is expected that the legal change can influence the long -term price advantage of IEX and trade volumes. This fundamentally changes the market structure and puts pressure on the sales model of IEX. Investors will display the share with a structurally weaker outlook.
Technically, the stock does not look very positive with a strong bearish close on weekly time frames. Such graph structures tend to indicate a long -term lateral movement with a limited top.
What do you think the market can support now? Is there an optimism in sight?
If we see a number of pleasant surprises in the field of profit, progress in the field of economic reform or global headwind, the markets can stabilize or even bounce. Certain sectors and companies will probably continue to improve even if the overall mood remains a bit downbeat. The trade agreement with India can also be an important factor
Which sectors are you now focused on?
I am fairly positive about power/renewable energy sources, select private banks and pharmaceutical, capital goods and to a certain extent. These areas show profit feathering and have a policy year that support them.
Are there shares within those sectors?
- Financials: HDFC Bank, Icici Bank, Bajaj Finance
- Industrials: L&T, Siemens
- Pharma – Torrent Pharma, Cipla, Dr. Reddy’s
(Disclaimer: recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times
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