Edited excerpts from a chat:
Following the directional move seen on Friday, how has your view changed on Nifty’s trajectory for the March series?
The overall outlook remains bullish, contingent upon the index maintaining its position above the key level of 22,200, previously a significant resistance point. There is an optimistic perspective that the Bank Nifty index could play a leadership role in the ongoing rally, potentially surpassing its all-time high and reaching levels beyond 48,500.
Largecaps have now begun to outpace small and midcaps amid all the news flow around Sebi’s letter to AMFI. Are the charts indicating that this could be the beginning of a slowdown or even a deeper corrective phase in smallcaps?
The long-term charts for both mid-cap and small-cap segments suggest an upcoming phase of extensive consolidation preceding the elections. In this scenario, large-cap stocks are likely to gain favor, especially considering their prolonged underperformance. The recommended strategy is to adopt a phased approach when buying large-cap stocks during this period.
IT stocks have not participated in the rally. How to deal with the downtrend now?
The Nifty IT index is currently in an uptrend, maintaining higher highs and higher lows on the daily chart. The index has consistently rebounded from the support zone around 37400-37300. However, sustaining below this support level on a closing basis could disrupt the current uptrend. The immediate resistance on the upside is situated at the 37900-38000 zone, and a breakout above this level is likely to accelerate the upward movement
Tata Steel shares saw buying interest in both Friday and Saturday’s session and hit fresh 52-week levels with high volumes. What’s next?
Nifty Metal index experienced robust buying during the week, attributed to a correction in the Dollar Index and flat to positive data from China. This positive sentiment was widespread across the sector. The Metal index successfully broke out from the resistance at 8000 on the daily chart, and a sustained hold above this level is anticipated to accelerate the rally towards the 8500-8700 zone. Notably, Tata Steel exhibited a strong breakout on the daily chart, accompanied by a sharp surge in volumes, surpassing the resistance at 150. This makes Tata Steel a compelling buy, with support at 140 and potential targets of 170-185.
Give us your top ideas for the week ahead.
1.) STOCK NAME: BUY GAIL AT 185, SL-175, TGT 200/205
RATIONALE: The stock is exhibiting a consistent uptrend pattern with higher highs and higher lows intact on the daily chart. Currently, it is finding support at its 21-day simple moving average (SMA) situated at 180, serving as a cushion for the bulls. Additionally, the momentum indicator RSI has provided a positive crossover and is poised for a breakout from a falling trendline on the daily chart. These technical signals suggest a bullish outlook for the stock.
2.) STOCK NAME: BUY TATASTEEL IN THE RANGE OF 150-145 , SL-139, TGT 165/180
RATIONALE: The stock has recently witnessed a powerful breakout on the daily chart, accompanied by a notable surge in volumes. Additionally, the formation of a Morning Star pattern, a bullish reversal candle pattern, indicates strong support for the stock. The momentum indicator, RSI, has also provided a buy crossover, confirming the bullish undertone in the stock.
3.) STOCK NAME: BUY GSFC AT 225 , SL-215, TGT-240/250
RATIONALE: After experiencing a sharp correction from its peak at 322 to 225, the stock is currently situated in an oversold territory. The momentum indicator, RSI, has displayed a positive crossover from the oversold region, suggesting that a potential pullback from the current levels should not be overlooked. The stock has a support level at 215, and the anticipated upside targets are 240/250.