Nagaraj Shetti, Technical Research Analyst at HDFC Securities feels there is a higher probability of Nifty Bank crossing above 40,000 mark by Diwali. “The overall chart pattern of Bank Nifty indicates more upside for this sector for the coming week,” he said in an interview to Moneycontrol’s Sunil Shankar Matkar.
On the Nifty50, Shetti, who has an overall rich experience of 11 years in the field of technical research, said considering a strong upside momentum in Nifty and overall positive chart pattern, he expects Nifty to surpass 18,500 levels by next weekly expiry by October 21.
Q: Will the Bank Nifty cross the 40,000 mark by Diwali? What are the stocks that can drive the index towards 40,000?
Yes. There is a higher probability of the Banking sector crossing above the 40,000 mark by Diwali. The overall chart pattern of Bank Nifty indicates more upside for this sector for the coming week. Besides Banking heavy weights, Axis Bank, ICICI Bank, SBI, Kotak Mahindra Bank and IndusInd Bank are expected to contribute further upside in the banking sector.
Q: What is the weekly expiry indicate about the market trend in the coming week? Will the Nifty50 hit 18,500 or 19,000 by Diwali, considering the current momentum?
Considering the strong upside momentum in the Nifty and the overall positive chart pattern, we expect the Nifty to surpass 18,500 levels by the next weekly expiry (October 21). Having moved up swiftly in the recent period, there is a possibility of minor downward correction… However, levels of 18,050-18,150 are crucial supports.
Q: What is the open interest and PCR data indicate? Also what does the open interest and PCR mean for common man?
Nifty Open Interest Put call ratio has risen to 1.49 levels from 1.28 levels yesterday. This rise in the Put Call ratio is largely on the back of Put writing 18000 levels which Indicates that 17900-18000 level to act as a strong support going forward. On the higher side 18,400-18,500 level to act as a resistance where we have seen Call writing.
Q: What is your reading on FII data in the futures & options segment and what is the trend indication from the data?
FIIs created fresh longs in the Index futures segment on Thursday where they net bought worth Rs 1,205 crore with their Open Interest going up by 10,815 contracts. FIIs long to short ratio in the Index Futures segment moved up to 1.74 levels from 1.48 levels. In other words out of their positions in the Index Futures segment 63 percent is on the long side. This augurs well for the markets.
In the index Option segment also, on Thursday they net bought 16,234 contracts of Calls and shorted 14,000 contracts of Puts indicating they are expecting limited downside in the markets.
Q: What are the sectors and stocks to watch out for in the coming week?
Most of the sectors are looking attractive, but among positive sectors IT, Metal, Realty, Banking and PSU Banking are to be watched for next week. On the stocks, Tata Steel, JSPL, DLF, Axis Bank, SBI, and Canara Bank are looking attractive.
Q: Midcap and Smallcap indices consistently outperformed frontliners. Will the outperformance continue in coming weeks too?
Yes. There has been a consistent up move in the broad market indices like mid cap and small cap segments after a recent consolidation movement. The overall positive small and long term charts are suggesting further upside for these sectors for next week, before showing next round of profit booking from the highs.
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