Shorts to run for cover above 24,200: Analysts
Nifty expected to touch 24,400-24,500 in the near future. This implies an upside of as much as 2% over Friday’s closing of around 24,000. The action will most likely be stock-specific, while analysts said the downside is a good time to accumulate large-cap stocks.
DHARMESH SHAH HEAD OF TECHNICAL, ICICI SECURITIES
Where is Nifty headed? On expected lines, the Nifty managed to hold the long-term rising trend line that coincided with the 200-day EMA, despite the depreciating rupee and consistent FII sell-off. This highlights buying demand at the elevated support base, further validated by a positive divergence on the daily RSI. The overall price structure reiterates our positive stance with a target of 24,400 for the coming weeks. We expect volatility to remain elevated at the onset of the third-quarter earnings season, policy measures from the Trump government and Union budget expectations. Strong support is placed at 23,300 which we expect to hold as it is the confluence of 61.80% retracement of the June-September rally (21,281-26,277) coinciding with the 52-week EMA at 23,350. Buying on dips in quality stocks would be the prudent strategy.
What should investors do? We expect BFSI, Auto, Pharma, IT and PSUs to be in focus. Capital Goods & Infra, PSU Banks offer favourable risk-reward. Among large caps, RIL, Infosys, Bajaj Finance, M&M, Titan, BEL, United Spirits, PNB and PFC look good for 5-6%. In midcaps IREDA, JK Cement, Rallis, EIH, NCC, Latent view, PNB Housing, Federal Bank, Jubilant Food look good for 8-10%
