The benchmark indices, the Sensex and the Nifty, witnessed notable volatility via the week, finally closing decrease as traders reacted to uncertainties over U.S. tariff developments.
Analyst Rahul Ghose, Founder and CEO, Octanom Tech and Hedged.in interacted with ET Markets relating to the outlook on Nifty and Financial institution Nifty together with an index technique for the upcoming collection. The next are the edited excerpts from his chat:
How is Nifty positioned technically as we step into the June collection?
The Nifty 50 index is presently in a consolidation section, buying and selling between 24,462 and 25,116, reflecting market indecision. The collection of Dojis and spinning tops on the each day and weekly time-frame additional means that markets are prone to keep range-bound within the quick to medium time period. Key help resides at 24,164-23,935, whereas resistance is seen at 25,070 to 25,150. The June F&O collection begins with elevated open curiosity (1.26 crore shares) however decreased FII lengthy positions in comparison with earlier months. Traditionally, June has been beneficial, with three constructive returns within the final 4 years. Nifty can head to 25,740, as soon as we see two closings above the 25,100 mark, till then one ought to solely look to be in hedged positions.
Financial institution Nifty was eyeing its all-time excessive lately — how does the setup look now?
Financial institution Nifty is consolidating between 53,500 and 56,000 with a collection of indecisive candles. A sustained transfer above 56,100 (which is the excessive of the bearish engulfing candle) may set off a rally towards 56,700. Financial institution Nifty appears to be like prone to escape.
What indicators are you getting from latest FII exercise?
FIIs decreased Nifty lengthy positions to half of April/Might ranges, indicating warning. Nevertheless, their web shopping for in April-Might (Rs 25,841 crore) and give attention to the RBI coverage (June 6) and monsoon progress recommend potential catalysts for renewed momentum.
Given the present construction, is there extra readability in buying and selling the index or particular person shares?
The index’s rangebound motion (24,160–25,100) favours stock-specific alternatives, significantly in sectors like IT and pharma, displaying relative energy. Index merchants ought to look forward to a confirmed breakout/breakdown. A transfer under 23,900 ranges will open the chance for additional draw back the place whereas a transfer above 25,100 ranges would result in an upside. The larger time-frame worth motion means that, likelihood of Nifty transferring in direction of the upside is far larger than the draw back.
Let’s speak about some heavyweights — what’s the technical setup for RIL proper now?
RIL is forming a symmetrical triangle on the each day chart and is presently testing the higher boundary close to Rs 1,440. A breakout above Rs 1,440 with quantity affirmation may result in a transfer towards Rs 1,530-1,550 ranges. The inventory is holding above its 50-DMA and displaying constructive RSI divergence on the hourly chart — an indication of latent energy. Brief-term help lies at Rs 1,396-1,390 ranges.
How does HDFC Financial institution look on the charts?
Similar to RIL, HDFC Financial institution is buying and selling in a symmetrical triangle formation. A break above 1980 ranges with good volumes could lead on the inventory in direction of newer highs. Rs 1,980 occurs to be a short-term resistance for the inventory with a robust engulfing bear candle. As Financial institution Nifty is predicted to stay bullish, HDFC Financial institution is prone to escape sooner relatively than later.
What’s your technical view on ICICI Financial institution?
ICICI Financial institution is barely overstretched on the month-to-month & quarterly time frames. The RSI ranges on a month-to-month foundation are round 75, and quarterly, round 85. Since structurally it’s in a robust uptrend, one ought to look to enter on a pullback relatively than impulsively leaping across the CMP. Rs 1,300-1,320 space could be an excellent stage to enter.
How is Bharti Airtel buying and selling technically?
The inventory is in a robust uptrend on all time frames. Nevertheless, contemplating the vertical rally within the inventory lately, shopping for in a staggered method could be a greater strategy.
Let’s have your view on the businesses which have reported their This fall earnings lately. What are the chart indicators saying for Suzlon?
The larger time-frame charts of Suzlon are bullish and the inventory may proceed to commerce with a robust momentum. The weekly and month-to-month RSI ranges of Suzlon are above 60, suggesting a robust uptrend. Friday closed with a Headstone DOJI candle after a robust hole up, signalling the inventory may pull again within the quick time period. A pullback in direction of 58-60 could be an excellent alternative for re-entry.
Ola has been in focus — is there a tradable construction seen on the charts?
Ola continues to make decrease tops and decrease bottoms on a each day and weekly time-frame. The shopping for construction is clearly not seen on worth charts. Such shares are higher entered when the inventory breaks out publish some kind of base formation, prefer it occurred in Nyka or Zomato. Presently, this isn’t seen in Ola.
What’s the technical outlook for Mazdock proper now?
Technically, Mazdock is extraordinarily robust and all pullbacks shall be potential shopping for alternatives. With the latest rally, the indications have clearly entered an overbought territory, which implies merchants ought to solely look to enter such shares on a pullback. On charts,a pullback to the degrees of Rs 2,800-2,900 could be an excellent level to enter. This stage has a confluence with the 50 DMA & affords an excellent reward to danger ratio.
How is Bajaj Auto positioned technically after its latest strikes?
Bajaj Auto is presently buying and selling across the month-to-month 20 EMA & has been consolidating round that stage for 2-3 months. The inventory may proceed to hover round this vary earlier than transferring up once more. Total, technically, the inventory appears to be like constructive.
With the earnings season largely behind us, how are the important thing sectoral charts shaping up?
Among the many sectors, Nifty Financial institution, Nifty IT and Nifty metals look constructive on charts, whereas Nifty FMCG & Nifty Auto look destructive. Nifty Auto and FMCG are displaying indicators of consolidation on month-to-month charts & one must be very selective whereas choosing shares in these sectors. Nifty IT & Nifty metals look to be in robust momentum, buying and selling near their key averages. Any pullbacks could be a chance to purchase.
What are your prime technical picks within the IT area — each largecaps and midcaps?
Prime IT Picks: Largecaps (Infosys, TCS) for stability; midcaps (Coforge, Persistent) for breakout potential.
Which shares are presently displaying robust technical setups or breakout potential?
HDFC Financial institution & Reliance, each heavyweights, look to be on the verge of a breakout on the each day charts. Cummins appears to be like to be a robust momentum play and has big potential within the quick to medium time period. The inventory has simply come out of a base formation on weekly & is displaying indicators of transferring in direction of Rs 3,700-4,000 ranges within the short-term
Lastly, what generally is a go-to technique for the tarders to navigate the June collection?
Nifty: Commerce the vary (24,400–25,100) with stops. Go lengthy above 25,100& quick under 23900 ranges.
Sector – Obese on Banking & Midcap IT, Underweight on FMCG.
Commerce with tight cease losses. Be prepared to vary stance from bullish to bearish and vice-versa if the market breaks key ranges on both facet
(Disclaimer: Suggestions, ideas, views and opinions given by the consultants are their very own. These don’t characterize the views of The Financial Occasions)
