Edited excerpts from a chat:
Nifty futures rollover at 70.61% in May series is encouraging for bulls. What is the outlook and key levels to watch out for in the June series?
Nifty has experienced a strong rollover, indicating a bullish outlook for the upcoming period. However, Nifty Bank has seen lower rollover rates, suggesting that investors are booking profits in the current series. Sectors such as Auto, Cement, Pharma, PSU Banks, and Realty are expected to perform well in the upcoming series, while Oil and Gas and IT sectors are less favored. Among specific stocks, Grasim, Berger Paints, and HDFC twins have witnessed the highest rollover, with Grasim and Berger Paints remaining positive, while HDFC has seen a short rollover. On the other hand, ONGC, ICICI Lombard, and Hero Motor had the least rollover.
The overall view for the next series is positive for Nifty with an upside potential to reach 18800-19000. On the lower end. 18200 will continue to act as crucial support for the June series.
Given the huge buying by FIIs in the cash market and long position rollvers, do you think we can hit record high anytime in June?
Foreign Institutional Investors (FIIs) have remained net buyers in the Indian cash market. As of the current month, they have bought over Rs 20,000 crore. Additionally, they have also added long positions in the Futures and Options (F&O) segment, suggesting a positive sentiment towards the Indian market. The current trend of the FII participation coupled with technical set up in headline index Nifty indicates continued demand from the FIIs over the short term.
Friday saw heavyweight RIL moving 2% higher. What might have triggered the rally and do you think the rally is sustainable in the next week?
Charts suggest that the stock has experienced a consolidation breakout and has moved above its 200-day moving average (200-DMA). Furthermore, there is a double-bottom formation observed on the lower timeframe, indicating a bullish pattern. These factors collectively indicate the potential for a rally in the short term. The stock is expected to move up to around Rs 2,600, with support levels placed at Rs 2,430.
IT stocks have been on an upward trend with midcaps leading the way in the last one month. On the charts, which ones are poised for upside?
The IT Index has experienced a consolidating breakout, suggesting a potential upward movement in the sector. The Relative Strength Index (RSI) is in a bullish crossover, further supporting the bullish sentiment. However, there is a resistance level at 29600 that may pose a challenge for further upward movement. A decisive breakout above 29600 may induce further strength in the space. On the downside, there is a support level at 28800, which could provide a buffer in case of a retracement.
Why has Nifty Bank lagged behind and what should be the trading strategy for Nifty Bank traders now?
Nifty Bank has remained lacklustre primarily due to short build in HDFC Bank. The index has encountered resistance near its all-time high of 44,152. However, a decisive breakout above 44,200 could potentially trigger a strong upward movement. Traders are advised to consider buying near the support level of 43,500 or upon a breakout above 44,200.
Give us your 3-4 top ideas for the week.
1) Dabur: Buy at Rs 538-543. Target price: Rs 585. Stop loss: Rs 519
The stock has experienced a breakout above a falling trendline, which suggests a reversal of the downtrend. Furthermore, it has been sustaining above a critical near-term moving average, indicating strength in the stock’s price action. The Relative Strength Index (RSI) is in a bullish crossover, supporting the bullish outlook. The potential upside target is at 585, indicating further room for price appreciation. On the downside, there is a support level at 519, which may act as a buffer in case of any retracement.
2) TCS: Buy at Rs 3,330. Target price: Rs 3,550. Stop loss: Rs 3,240
The stock has experienced a breakout above a swing high, indicating a bullish trend reversal. Additionally, it has been consistently trading above a critical near-term moving average, indicating strength in its price movement. The Relative Strength Index (RSI) is in a bullish crossover, further supporting the bullish sentiment. The potential upside target is at 3550, suggesting the possibility of further price gains. On the downside, there is a support level at 3240, which may provide a cushion in case of any price retracement.
3) Tata Consumer: Buy at Rs 790. Target price Rs 855. Stop loss Rs 760
The stock has experienced a breakout above a consolidation high, suggesting a potential uptrend. Additionally, it is on the verge of giving a Cup and Handle breakout, which is a bullish continuation pattern. The stock has been consistently trading above a critical near-term moving average, indicating a strong position. The Relative Strength Index (RSI) is in a bullish crossover, further supporting the bullish sentiment. The potential upside target is at 855, indicating the possibility of further price gains. On the downside, there is a support level at 760, which may act as a support in case of any price retracement.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)