Buyers receding, Nifty support at 19,060 and 18,900: Anand James

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Chief Market Strategist Anand James

With Nifty under pressure amid weaker global cues, buyers appear to be receding with supports identified at 19060 and 18900, says Anand James, Chief Market Strategist at Geojit Financial Services. “Prospects of a revival in uptrend, rests on the ability of 19400 to attract bargain buying, having retraced 61.8% of the rise that unfolded since 3rd August. Downside marker may be placed at 19360,” he said.

Bank stocks have been dragging down the Nifty. How are the charts looking like for this week?
The 19,500 region came to the rescue multiple times during the week, but the 19600-670 region stayed true to our suspicion of forcing a turn lower, even while we were betting on a relief rally in the week before. Buyers appear to be receding, expecting deeper falls, with supports identified at 19060 and 18900. Prospects of a revival in uptrend, rests on the ability of 19400 to attract bargain buying, having retraced 61.8% of the rise that unfolded since 3rd August. Downside marker may be placed at 19360.

Nifty PSU Bank surprised with a sharp rally last week. How are some of its constituents like Indian Bank, IOB and Bank of Maharashtra looking like? Which ones look well placed?

IOB made the largest gain on Friday, but this one would be the least favoured, despite having the largest potential for rise, as we do not like its volatility. Indian Bank has made a slew of continuation patterns, making it well poised to continue uptrend, but the record peak of 427 being not far away, we are prompted to look for even better prospects, which leads us to Bank of Maharashtra, giving us more comfort as the pick among the three, for the week ahead, with downside marker placed at 36.6.

Given the way Nifty Bank and Nifty IT behaved, do you think it is time for IT stocks to outperform bank stocks?
Seen in isolation, while Nifty 50 and Bank Nifty rose above their respective record peaks, IT index failed to do so, and is far away from record peaks. While this gives it a value proposition, it must be remembered that the IT index has remained in a broad trading range, since May 2022 which reasons in favour ignoring the present rise as we are now closer to its upper range. However, while almost all the recovery attempts during the phase occurred at a 45 degree angle, the most recent ones have unfolded at 72 and 65 degrees, hinting at an increase in risk appetite and an elevated chance for a breakout higher soon. Also lending support to our positive stance, is the fact that FPIs had raised investments in the IT sector in July, after four months of consistent selling.

Gland Pharma was among the top gainers in pharma pack. What should be the trading strategy ahead?
Three days of consecutive down close did raise concerns as to whether the week’s early gains would be entirely wiped out. But the strength of the uptrend should be seen in the light of the sustained uptrend that has been in play since May 2023, registering a near 100% gain. Despite this extraordinary rise, and in spite of the correction attempts, we are encouraged to expect an extension in uptrend aiming at 2000-2200 within the next three to six months, as long as corrections are held above 1400.

Which are the top stocks that would be on your watchlist?
1) JINDALSTEL (CMP: 698)
View: Buy
Entry range: 698 – 685
Target: 728 – 750
Stoploss: 670

The stock has been making higher highs and higher lows since July 2022 and has broken above rising trendline resistance of 671 in the weekly timeframe making a Marubozu candle hinting at continuity of upside. Also, the MACD has broken above the signal line in the daily time frame supporting our assumption. We expect the stock to move towards 728 and thereafter towards 750 in the coming few weeks. All longs may be protected with stoploss placed below 670 levels.

2) EXIDEIND (CMP: 269)
View: Buy
Entry range: 269 – 265
Target: 279 – 287
Stoploss: 260

The stock, after moving within a range of 266 – 245 since July 2023, has broken out of range resistance of 267 this week. Also, MACD has broken above the signal line in daily time frame hinting at positivity to continue in coming days as well. We expect the stock to move towards 279 and 287 in the next few weeks. All longs may be protected with stoploss placed below 260 levels.

First appeared on The Economic Times

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