Let us start with the market texture at the index level itself, Nifty as well as Bank Nifty, how does it look to you?
Absolutely see what is happening in the markets in the last week or so. It is like we went into the Fed meet quite gung-ho thinking that it is a 25 bps and that was factored in and everyone was bullish. So post that outcome yesterday morning we saw a sell-off. So markets however despite that profit booking move or a sell-off move from higher levels, Nifty was able to hold 17000-17030 support zones. It is just trading in a tight range.
However, now going forward 16950-17000 support zone will be very important because if we see the derivative data 17100 as well as 17000 puts, we are witnessing a clear addition.
So that means if we adjust the premiums that means 16950 will now act as a very strong support on the downside. On the upside what is happening is that 17200 is now acting as a tight resistance. So from 14th March there has been four or five occasions where Nifty has not been able to cross 17210-17230 band. So I feel for the next week, for the final expiry week till next Wednesday it would be in a range between 16950 and 17180-17200.
Any breakout on either side we will see a big trending move going ahead because one thing if we just add here is the volatility index. Now volatility index despite this kind of a choppy move and some kind of a selling pressure it is not able to cross 15-15.5.
So until and unless we are below 15.5, we do not move above that level. I feel that markets can be in a range but they have a scope to move up because a lot of bad news are already factored in.
So on a Nifty level it would be quite in a range between 16950 and 17200-17230. From a Bank Nifty perspective it is trading very close to its 200 DMA which is at 39740. So we are just about to touch that level and that for me is stronger out of the two because Nifty is away 2% from its 200 DMA and Bank Nifty is making an attempt to cross that. So Bank Nifty 39450-39500 is a strong support. Until this holds there could be a move up to 40200 on the upside.
Then in such a market scenario what would your top picks be?
My top picks are a couple of them. I feel they could do well here in these kind of markets. One is ABB. Now we have seen these capital good names, Larsen, ABB Siemens do well in the last month despite the market fall. So here also today if we see ABB in the last month it has been an outperformer.
And I feel while the markets are in a range these stocks which are already outperforming and which are technically very strong now, even if we see the daily charts and weekly charts, they are trading above all their moving averages and they are trading close to its yearly highs.
And on the weekly charts also it is forming a higher top, higher bottom formation. So I feel that this stock can move up to 3450-3480 on the upside and one can keep a stop loss at 3320 on the downside.
Since we have you with us I want to talk to you about the two sectors which are clearly making news today. Any stock from the AMCs post-correction that you like and from the IT space, is there any stock that you would say that the risk reward is favourable?
IT in the last few sessions like in the last week on 17th March, has broken down below its 200 DMA. Since then, every attempt of a recovery is being met with selling pressure at higher levels.
So while it is very close to its support zones like which were the January 2023 lows and post that we saw 3000 point up move in Nifty IT index. But once again it is trading very close to those lows and there are no signs of any big recovery or a big bang rebound.
So despite the good results from Accenture yesterday, from today morning also what we are seeing is that from higher levels there is still some selling pressure in IT. Along with Nifty IT, the top stocks within the sector, TCS, Infosys, HCL Tech all are under selling pressure, all are near their multi-month lows but still there is no sign of a rebound.
Now if we go into the mid-cap IT space also which was buzzing in the last month or so, in the month of January, now there is pressure on that side of the market also, that side of the index also.
I feel one should wait for Nifty IT to move beyond 28600 on the upside for a recovery up to 30000. So 28600 on Nifty IT would be my level to watch out for as a trigger point for the index to move upside.