Ajay ji
ET Now: What we can expect to see in terms of levels in Monday’s trading session, given everything that has happened on the geopolitical front, how our markets have reacted over the course of the week, we have largely had a mixed week? Yes, sure, we have emerged in the green, but largely it has been very volatile for us. Do you see this volatility continuing going ahead into Monday’s session or can we see a better session than we have seen on Thursday and Friday?
Rajesh Palviya: Definitely, volatility would be there. So, the beginning of this May series started on a cautious note as we have seen that Nifty rollover stood at 79% compared to the last three-month average. It is below the last three-month average, and there is a shedding of around 12.50 lakh shares in this Nifty open interest for this new series, as well as the same behaviour we have witnessed for the Bank Nifty also. Also, Bank Nifty has also shown shedding of around 7.50 lakh shares for this new series. So, investors, traders are a little cautious about this geopolitical tension, which is escalating. And again, today’s session, especially, we have witnessed that profit taking in a broader market, most of the sectors have corrected. The major hit we have seen in the banking and financial as there was a very sharp up move in the last couple of weeks for banking stocks.
So, here we have seen a significant profit booking, but Nifty is just close to the 200-day moving average, which is placed at around the 24,000 level. So, if we break below the 24,000 level, then there is a possibility of furthermore profit taking in the market in the coming week, and the possible down move can extend towards 23,800 to 23,700, which is the next important major support area. In today’s session, the major call writers have shown activity at the 24,300 strike price as well as on the put side, the major base is now taking place at 24,000, followed by 23,700. So, below 24,000, another 200-300 point correction we may see in the Nifty. But for Bank Nifty, in today’s fall, Bank Nifty has filled the bullish gap area which was there in the 54,400 to 54,700 zone, and that gap is already filled in today’s (Friday) fall. Now, for Bank Nifty, if it is a slight further below 54,500, then we may see furthermore cuts towards the 54,000 level, that is the next major support area for the Bank Nifty. On the higher side, the major call concentration area is now placed at 55,000, so that level may act as a major supply zone or resistance in the near-term perspective.
ET Now: Want to get your sense on the Nifty IT index because we have had major Nifty companies from this basket report their numbers already. It has been a largely mixed set, but it has not been all that bad either. Do you believe after the kind of correction that we have seen over, let us say, the last six months or on a year-to-date basis as well, do you believe that now this sector on the charts is ready for a run-up and the consolidation is behind us or is there some more room for consolidation as we go ahead?
Rajesh Palviya: So, we have discussed last week also, and we have seen a very strong rally from the recent low of Nifty IT, and Nifty IT has almost recovered 10% from its recent low. Looking at the recovery in the largecap as well as in the midcap IT stocks, the results impacts are already priced in in most of the stocks at this juncture and some of the stocks from the largecap universe like TCS is looking promising as well as take Mahindra, these two stocks are looking promising at this juncture from the largecap it. And from midcap, Coforge and Persistent can be looked at as both stocks have shown a very smart recovery from their recent low. Looking at the near-term structure, both stocks are now negotiating with their 50-day moving average. So, we may see some consolidation in IT stocks. But going forward, if Nifty IT manages to sustain above the 34,500-34,800 zone, this rally may extend further, and a possible target for Nifty it we could see towards a 36,800 to 37,500 kind of zone. So, a couple of weeks would be interesting for IT stocks, and we may see another 3% to 4% kind of up move from here onwards.
ET Now: Help us with some of the stock specific ideas that you are liking right now. What is looking good on the charts?
Rajesh Palviya: Two stock ideas, one is on the long side. On the long side, Grasim is looking promising. The way stock has shown outperformance in this volatile market, the stock is continuously making higher top and higher bottom formation. And looking at the near-term, short-term structure, we believe that Grasim can extend its gains. We are projecting a target for Grasim in the near-term perspective, so one can buy this stock with a stop loss of 2690. On the short side, the stock one can look for going short that is Voltas. After today’s decline, the stock has broken its up-sloping trend line on a weekly chart, short buildup is there in the data. We believe that Voltas can extend its down move, projecting the target towards 1190. So, one can go short in Voltas Future with a stop loss of 1258.
