By Vishal B Malkan Founder, MalkansviewThere is a possibility of broader sideways movement for the Nifty between 11,900 and 11,550 levels over the next 3-4 weeks, before showing any decisive breakout on either side, according to technical analysts.
Wipro, HCL Tech and Tech Mahindra look promising for upsides of 15-20 per cent from their current levels, from a mediumterm perspective, they said.Where are We Nifty had been hovering just below its all-time high levels of 11,800.
But this week witnessed it retreating strongly from this level down up to a low of 11,570.
This move clearly overpowers the long-standing efforts of the bulls to cross the all-time high.
The index did make an attempt to move above the high of the bullish candle pattern formed on April 24, but failed to sustain there thus forming a bearish shooting star pattern.
This move caused a bearish range shift in RSI on the daily charts, which suggests the formation of an intermediate top.
Bank Nifty followed suit with bearish patterns on daily weekly charts.
29,500 level stands as an important support for this Index.What is in Store The recent low of 11,550 is an important level to watch out for.
The break of this level will confirm the three indecisive candle patterns on weekly charts.
This opens the room for a further downside of 300 points.
The bank index too could witness a slide of another 1,000 points, upon breaking the low of 29,500 levels.What could an Investor Do One could avoid taking fresh long positions until we see a decisive move above these resistance levels.
On the sectoral front, majority of the stocks from the IT sector are trading at their all-time high levels.
Wipro, HCL Tech and Tech Mahindra look promising for an upside of 15-20 per cent from their current levels, from a medium-term perspective.
Private sector banks Axis, Yes and IndusInd have broken important support zones while forming bearish candle patterns on daily and weekly charts.
These can be traded on the short side for a 7-10 per cent decline.