“Canara Bank, Union bank, Indian bank, Bank of India and Indian Overseas bank could lead the next round of upside. However, as the short term RSI of most of the stocks are hinting at an overbought situation, it would be prudent to enter stocks on a pull back,” he says. Edited excerpts from a chat:
The breakout that we saw on Friday in Nifty didn’t last the entire session. If the index crosses 22,000 again next week, what should be the targets?
Anand James: The sprint on Friday was exhilarating, but turned out to be brief, as it quickly lost momentum, having frozen in the face of the record peaks. This is a clear sign of rejection trade, and should ideally lead to a full reversal aiming at the 21200s at least again or a potential deep dive to 20800. Having said that, we would draw some inspiration from the successful push above the peaks of 23rd and 30th of January both of which had seen heavy selling, even the run up did not find the momentum required to see a new record close. We are pinning our hopes on the support clusters around 21720 or 21600 in a worst case scenario to allow bulls to regroup and avoid a full reversal that Friday had indicated. This would encourage us to retain our upside objective of 22450-550 for now. However, we are open to the possibility of extension of uptrend to 22750-23500, should momentum persist, but the present set does not offer enough reason to commit to it right away.Nifty Bank has bounced back with a 3% jump in the week. Which side of the trade would you be on next week?
Anand James: Nifty bank’s performance has been underwhelming when compared to Nifty. This is evident from the rejection trades appearing strong from the 46600 vicinity on Friday, which has acted as a fort for the bears at least two times in January. Unlike Nifty which is closer to record peak, Nifty bank is about 5% away from its record peak. But this allows for a different formation for regrouping, and we hope that the 20-day SMA at 45569 to arrest declines and attempt a rise towards 50000. However, slippage past 45569, could expose 44000-42500.
Which stocks do you like within the PSU bank stocks? The Budget has sparked another round of buying in this pocket?
Anand James: The Midcap PSU Banks had their fair share of contribution to PSU Bank Index’s upside of around 11% this week. Even though short term RSI of Midcap PSU bank stocks remain elevated, the weekly charts look promising and are expected carry the positive momentum forward in coming weeks. Canara Bank, Union bank, Indian bank, Bank of India and Indian Overseas bank could lead the next round of upside. However, as the short term RSI of most of the stocks are hinting at an overbought situation, it would be prudent to enter stocks on a pull back.
NBCC jumped over 47% in the week. What are the charts indicating at?
Anand James: The month of January has seen an unprecedented streak of high volumes, with Friday’s jump in prices also accompanied by record volumes. Usually such large jumps in prices attract caution, especially with 5 weeks of consistent close above the Bollinger band. However, the persistent high volumes for the last fortnight or so, elevates the chances of continuation of uptrend. An overly optimistic scenario projects 220 as the likely upside objective, but there is no reason to throw caution to wind, and the nearest downside marker would be 151.
Give us your top ideas for the week ahead.
MAPMYINDIA (CMP: 1852)
View : Buy
Targets : 1940 – 1990
Stoploss : 1765The stock has been on a decline since November making lower tops and lower bottoms. This week’s decline has ended with a pinbar doji in the daily time frame which is prompting us to be looking for a pull in the short term. We expect the stock to move towards 1940 and 1990 in the next few weeks. All longs may be protected with stoploss placed below 1765.
NTPC (CMP: 332)
View : Buy
Targets : 348 – 360
Stoploss : 316
The stock has been attempting a break of the horizontal resistance of 325 which happened on Friday (02 Feb 2024). The breakout is backed by MACD breaking above the signal line in the daily time frame which is also offering a strong bullish construct for the stock in the near term. We expect the stock to move towards 348 and 360 in the next few weeks. All longs may be protected with stoploss placed below 316.
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