INSUBCONTINENT EXCLUSIVE:
Even as Infosys, HCL Technologies, and Tech Mahindra are showing signs of a technical rebound, Anand James, Chief Market Strategist, Geojit
Investments Limited, any such recovery is likely to be met with renewed selling pressure
A sell on rise strategy may be employed.Edited excerpts from a chat:Nifty has seen two successive weeks of negative endings amid lack of any
positive fundamental triggers to take the market higher
How do you look at this consolidation mode with a downside bias from the technical lens?Following a week-long consolidation and a breakdown
on Friday, only 24% of Nifty50 constituents ended up closing above their respective 10-day SMAs
This is the lowest number since early June
Parabolic SAR has also given a sell signal, which is the first time since late June.We have brought in the 200-day SMA in our calculations,
which at 24,100 is now over 4% away from present levels
Incidentally, 46% of both Nifty50 and Nifty500 constituents are now trading below their respective 200-day SMA
Our hopes are now at 24,920, which is near the 50-day SMA to provide a window for reversal.IT stocks were among the worst hit last week as
investors don't expect much from the Q1 earnings season as far as largecap IT stocks are concerned
Do you see chances of more downside ahead?The Nifty IT index is showing signs of underlying weakness, highlighted by a prominent bearish
Marubozu candle on the weekly chart
This suggests strong selling pressure and a lack of buying interest
The weekly MACD histogram has formed a reversal candle, reinforcing the bearish sentiment
From a derivatives perspective, most constituent stocks have witnessed short additions on both daily and weekly timeframes, indicating
sustained bearish positioning
This could potentially drag the index down towards the 37,050 level in the near term
However, on extremely short-term periodicities, the index is approaching oversold territory
Live EventsKey stocks like Infosys, HCL Technologies, and Tech Mahindra are showing signs of a technical rebound, which could lift the
index temporarily towards the 38,000 mark early next week
That said, any such recovery is likely to be met with renewed selling pressure
A sell on rise strategy may be employed.FMCG stocks were on a positive trajectory given growth seen in their Q1 business updates
How do you read the momentum building in the days ahead?Nifty FMCG index has been trading within a descending trend channel since April
Earlier this week, it briefly broke above the channel resistance near 55,960 but failed to sustain the breakout, closing below both the
resistance and the Supertrend level
This failed breakout adds to the uncertainty surrounding the continuation of the upward move.On the hourly chart, the index has been moving
A pullback attempt from this region is possible
derivatives standpoint, short positions have outweighed long additions on both daily and weekly timeframes, indicating waning bullish
booking and remain under pressure
Looking ahead, the index may remain neutral to weak in the coming week
However, relatively resilient names like Hindustan Unilever and Dabur could help cushion deeper declines.BSE shares were among the worst
performing ones within Nifty500 and ended the week down 10% amid negative news flow around derivatives
given the feeling that the stock has entered a full fledged bear trend
This encourages us to plan for a sideways move next week
Signals towards upswings are not forthcoming yet, but we will know, once a consolidation gains dominance over the declining spree.Give us
upward-sloping Widening Wedge pattern since May
After hitting a fresh all-time high earlier this month, the stock has entered a phase of profit booking
Over the past three sessions, the formation of multiple Doji candles near the lower boundary of the wedge suggests indecision and potential
attempts to stabilize or rebound from current levels.On the daily chart, the MACD histogram is showing early signs of exhaustion, hinting at
a possible reversal in momentum
If the stock manages to hold above the wedge support, a move toward the 1,930 level could unfold over the next few weeks.Traders holding
Despite this, it formed an inside bar Doji candle on Friday, suggesting a potential attempt to reverse course
to the bullish setup.Given these technical cues, the stock is likely to move toward the 630 level in the near term
Traders holding long positions should consider placing a stop-loss below 589 to safeguard against downside risk.(Disclaimer:
Recommendations, suggestions, views and opinions given by the experts are their own
These do not represent the views of the Economic Times)
