Market experts suggest that the sudden change in sentiments is a defining feature of range-bound markets. Throughout the week, markets stayed volatile.
Amit Trivedi, CMT, AVP, YES Securities, said that both Nifty and BankNifty formed multiple sizable bullish candles. Swift recovery from the support zone coupled with improvement in the internal breadth of Nifty infers key support near the 15,800-16,000 zone.
“Next week, Nifty is likely to revisit its immediate hurdle near 16,400,” he added. “If this hurdle is decisively beaten, it may unlock upside potential till the 16,550 zone.”
Nifty has lost about 13 per cent from April highs due to a host of domestic and global factors, including mixed Q4 numbers from India Inc, rising inflation, crude oil prices, geopolitical worries and rate hikes.
The sectoral trends are mixed, said Trivedi. “From an investment perspective, the ideal strategy is to stay invested in sectors that are holding ground and outperforming the benchmark index,” he added.
The technical expert believes the markets will remain volatile due to higher VIX levels. He advised traders to initiate shorts in the weaker stocks during the bounce-back action, but with strict stop losses.
Despite rallying close to 20 per cent in 2021, the Nifty Auto index remained an underperformer in the last year.. However, Trvidedi sees the index to rise in the near term.
“Recent structure of select Auto stocks shows relative strength, while the overall chart set-up shows more upside potential,” he added. “One can accumulate Tata Motors and
for a possible upside of 8-12 per cent.”
The chartist from YES Securities has backed a few more names from a trading perspective. He said that a few beaten-down stocks may show some respite.
He has recommended
between Rs 560-570 with a strict stop loss of 530. “The stock has recently surpassed its hurdle zone,” with a short term surge of Rs 630 is possible.
“SBI has managed to defend levels of Rs 440,” said Trivedi. “Positive follow-up action is likely to attract buying interest which may, in turn, lift the stock till the Rs 500 zone.” He suggested a stop loss of Rs 440.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)