By Sacchitanand Uttekar
This is just a relief rally, and therefore, one needs to keep booking timely profits and should stay light on positions, say technical analysts. Midcap IT space still could be participative along with consumption stocks which could continue to deliver consistent returns in the long run. Tyre has been an interesting sector which has attracted some good volumes of late along with two-wheeler stocks.
Where we are: So far, the Nifty has not witnessed any significant price action, but the series of narrowranged bodies indicate lack of momentum, which is keeping the bulls on their toes. The ongoing cluster of narrow bodies are maintaining their shadows above the immediate support line adjoining the lows of 10,097 to 10,227.45 which is a good sign with the RSI ascending towards 60.
What is in store: With the result season about to kick in, rising concerns about high crude oil prices coupled with trade-war fears will keep the market volatile. Our index is in close proximity of its ‘channel’ pattern target of 10,600, while the major support zone at 10,300-10,200. During the week gone by, the derivatives data indicates an upward shift in band to 10,700-10,300 from the earlier 10,500-10,000. Though the highest PE OI stands around 10,300 closely followed by 10,200, while highest CE concentration is now placed around 10,700. Hence, expect the index to gyrate within the broader range of 10,620-10,300 during the week with a slightly cautious stance due to its proximity towards the upper end.
What could investors do: Despite the ongoing volatility, stock-specific focus could yield good returns as the sector rotation remains healthy. Though banking remains a key ingredient for further stimulus, IT has been the flag bearer in the recent history. Midcap IT space still could be participative along with consumption stocks which could continue to deliver consistent returns in the long run. Tyre has been an interesting sector which has attracted some good volumes of late along with two-wheeler stocks. Metals, oil & gas, pharma, and PSU banks still remain deceptive due to their vulnerability towards global news flows. Investors and shortterm traders should remain selective while picking up stocks during this result season and adhere to a sectorspecific mix approach to negotiate the expected broad ranged.
(The author is AVP – technical (equity), Tradebulls. Views expressed at personal.)
Source: Economic Times