Nifty at risk below 24,000; MCX, Havells among stocks to watch next week: Rupak De
For the week ahead, De expects the 24,000 level to remain critical for the Nifty, while 24,700 could emerge as the next upside target if the market stages a recovery. He remains positive on the auto and PSU bank sectors, while FMCG and energy could stay under pressure. Among individual stocks, MCX continues to look technically strong after its recent rally, while Havells, ELGI Equipments and Himadri Speciality Chemical feature among his top trading ideas for the coming week.
Edited excerpts from a chat:
Nifty fell about 1% in the week as it tested the 24,300–24,400 support cluster. On the weekly chart, is this still a routine higher-bottom formation, or are we seeing the first credible signs of trend deterioration?
Since the Nifty made a high of around 24,800 on the first day of the CAS closing, the index has been slowly coming down with falling highs. Recently, the Nifty has fallen below 24,300 but found support above the 50EMA. Therefore, the short-term trend remains positive, but the index losing value almost every day over the last several sessions suggests that bullishness is waning, and the index is at risk of entering a short-term bearish phase if it falls below 24,000. Until then, a short- to medium-term uptrend is likely to continue, with the index remaining within a rising channel. Therefore, a buy-on-dips strategy might still remain the flavour of the season unless 24,000 is decisively broken. On recovery, the index might rise back to 24,700 and higher.
Bank Nifty remains trapped broadly between 57,100 and 58,000, with its major moving averages flattening. Is this consolidation constructive, or does the absence of banking leadership materially increase the probability of a breakdown?
Lately the Bank Nifty has been remaining within a defined range. On the lower end, 50EMA has been acting as support while on the higher end, 58000 has remained a cap for the week. The RSI remains in bearish crossover. In the short term the sentiment might continue to remain lacklustre with the index remaining capped within a band of 57000-58000.
Based on weekly relative strength charts, which two sectors are positioned to lead next week, and which two should traders avoid?
The Nifty Auto and PSU Bank indices are looking strong on the charts. Though the trend has turned a bit rough for most of the indices, these two sectors are looking good for the short term among the better-performing spaces. On the higher end, the FMCG and Nifty Energy sectors are likely to remain under pressure in the coming days.
MCX shares jumped over 10% amid positive news flow. Do you think the upmove is sustainable?
After weeks of weak performance, the stock has witnessed a smart recovery over the last week, gaining more than 11%. A consolidation breakout has been seen on the weekly chart, with the price moving above the 20-week EMA, suggesting a rise in optimism. The stock looks positive in the short term, with the potential to rise towards 3,200/3,300. On the lower end, support is placed at 2,750.
TCS shares fell around 4% in the week amid N Chandra’s resignation as Tata Sons Chairman. Do you think this could be a buy opportunity at this stage?
The stock witnessed selling during the week as it formed a bearish engulfing pattern, suggesting waning bullishness and a pause in the recent uptrend. Going forward, a fall below 2,350 might trigger a correction in the stock price. On the other hand, if it does not fall below 2,350, a smart recovery might follow.
Give us your top ideas of the week ahead.
Buy ELGI Equipments at Rs 609.50; SL 590; TGT 640
The stock has given a falling trendline breakout on the daily chart, accompanied by volume that was higher than the previous three days. The price has been sustaining above critical moving averages, confirming a positive trend. The RSI is in a bullish crossover and rising, indicating improving momentum. The sentiment is likely to remain positive in the short term, with the stock having the potential to rise towards 640. On the lower end, support is placed at 590, below which the stock might enter a consolidation phase.
Buy Havells at Rs 1298; SL 1268; TGT 1350
The stock has given a flag pattern breakout on the daily chart. The price has been sustaining above critical moving averages, confirming a positive trend. The RSI is in a bullish crossover and rising, indicating improving momentum. The sentiment is likely to remain positive in the short term, with the stock having the potential to rise towards 1350. On the lower end, support is placed at 1268, below which the stock might lose its momentum.
Buy Himadri Speciality Chemical (HSCL) at Rs 781; SL 760; TGT 815
The stock has given a consolidation breakout on the daily chart. The price has been sustaining above critical moving averages, confirming a positive trend. The RSI is in a bullish crossover and rising, indicating improving momentum. The sentiment is likely to remain positive in the short term, with the stock having the potential to rise towards 815. On the lower end, support is placed at 760, below which the stock might enter a consolidation phase.
