The Nifty has closed below an important support level held for the past few weeks. According to technical analysts, the bearish trend will continue, and the index may see a further decline to the major support zone of 18,900-19,100.
Bharti Airtel, Federal Bank, Godrej Consumer, Persistent Systems, Century Textiles and Castrol has formed bullish trends on the charts.
AJIT MISHRA
SVP-RESEARCH, RELIGARE BROKING
Where is Nifty headed this week?
Nifty has witnessed gradual profit-taking for the last five weeks, and there is no sign of a reversal yet. It has slipped below the short-term moving average and 50-day exponential moving average (EMA) of late, which may prompt further decline to the major support zone of 18,900- 19,100. In case of any attempt to rebound, 19,500-19,650 zone would continue to act as a substantial hurdle.
What should investors do?
Participants should continue with a stock-specific trading approach and maintain positions on both sides. Axis Bank is outperforming within the private banking basket and can strengthen further. Bharti Airtel is seeing a rebound after a marginal dip and will likely test new highs soon. Federal Bank has seen a fresh breakout with noticeable volumes. Godrej Consumer has formed a base at around 100-EMA and the stock could outperform within the FMCG pack. Persistent is set to end a consolidation phase. IEX has failed to cross the resistance hurdle around the `130- 135 zone despite multiple attempts. May see a fresh slide now.KAPIL SHAH
TECHNICAL ANALYST, EMKAY GLOBAL FINANCIAL SERVICES
Where is Nifty headed this week?
On daily chart, Nifty has been forming a sequence of lower highs and lower lows for the past 26 trading sessions. In the recent dip, the index lost over 3.5% from its peak. The index has closed below an important support level held for the past few weeks. Recent technical developments suggest that the bearish trend will continue. The Index will remain under pressure as long as it remains below 19,500 level, with potential support levels in the range of 18,800 to 18,600. The bearish view will continue in the coming week, and traders and investors must be cautious.
What should investors do?
Investors may consider an accumulation strategy when the Nifty hovers around the important support level of 18,800 to 18,600. In terms of sectors, the auto and energy sectors have been underperforming for the past few weeks, while midand small-cap stocks have shown strength. Stocks like Persistent, Century Textiles, and Castrol look promising, while L&T Finance and JSW Steel appear weak for the upcoming week.
VIRAJ VYAS
TECHNICAL & DERIVATIVES ANALYST, ASHIKA STOCK BROKING
Where is Nifty headed?
Nifty is currently in a phase of forming lower highs and lower lows since July 2023, indicating a weakening short-term trend. While buying interest has been around 19,300-19,200 levels, continuous retesting of these demand zones might weaken them. If these zones are breached, the index could trade lower to 19,000. Furthermore, the index trades below the 21-day EMA, signifying near-term bearishness. Any attempt at recovery is likely to face resistance around this average level.
What should investors do?
The longer-term bullish sentiment remains unaffected as long as the levels around 18,500-18,600 hold. This presents an opportunity for investors to use dips to accumulate quality stocks. The broader market displays robust underlying strength, suggesting the potential for continued stock-specific rallies and notable sectoral rotation. Notably, stocks such as Federal Bank, JB Chemicals, JBM Auto, Aster DM Healthcare, BLS International, PG Electroplast, LTI Mindtree, and V-Guard exhibit strength and could potentially outperform in the upcoming days.
