Sacchitanand Uttekar of Tradebulls Securities
Sacchitanand Uttekar of Tradebulls Securities says 19,000 on the Nifty50 in the current week looks possible but sustenance above the same could be challenging.
As observed on its daily scale the ongoing bullish wave from the base of 16,747.70 (September 30) can be easily defined as a classic 5-Wave bullish structure with its termination zone placed around 18,810 to 19015, he explained in an interview to Moneycontrol.
The VP-Research (Derivatives & Technicals) with 16 years of experience in analysing Indian capital markets via financial data feels technically the best-case scenario for Bank Nifty on the upside could be a move towards 44,600 at this moment despite the fact that it has been trending well above its 5-week EMA (exponential moving average) level since its breakout on October 14, 2022.
Do you expect the Nifty50 to hit 19,000 in coming weeks, but will it sustain above the same thereafter? Also what is the medium term chart structure telling you about Nifty?
Yes 19,000 in the current week looks possible but sustenance above the same could be challenging. As observed on its daily scale the ongoing bullish wave from the base of 16,747.70 (September 30) can be easily defined as a classic 5-Wave bullish structure with its termination zone placed around 18,810 to 19015.
We have already witnessed last Thursday’s expiry closing at 18,812 with its RSI (relative strength index) reading above its 75-level confirming its overbought state. But a reversal candlestick formation signal should be necessary to conclude its termination.
On its weekly scale we are observing that the current up move is a part of the corrective phase which commenced on October 22, 2021 with a high at 18,604. The index looks like adhering the ‘Flat Wave’ characteristics as none of its previous wave qualified into a fresh impulse thrust surpassing its preceding wave within its time limit.
The latest move could be qualified as a wave B of the Flat wave entered in its termination zone. Hence the outlook based upon the medium-term chart placement looks more corrective in nature with a probable swing back towards 17,580 to be established in the early part of 2023.
Bank Nifty looks strong, so can it hit 45,000 mark in December?
Technically the best-case scenario could be a move towards 44,600 at this moment despite the fact that it has been trending well above its 5-week EMA (exponential moving average) level since its breakout on October 14, 2022.
Primarily the move was triggered by news flows related to HDFC Bank-HDFC merger which provided the much-needed Philip; alongwith PSU banks which outperformed its private banking peers during this phase.
After consolidation and correction, the broader markets gained momentum in recent trades. Do you expect the momentum to continue in coming weeks and outperform benchmarks?
Nifty 200 & Nifty 500 indices are yet to register a firm close above their respective October 2021 life high zones. Since both these indices do not have any signs of exhaustions or divergence signs on its trend strength indicators they could continue with their recent outperformance.
How do you decide your buy or sell strategy for any stock and what are the technical parameters you use for the same? Also what is your advice to new comers who want to become a trader?
Separating noise via evaluating trends based on their wave characteristics is a must have approach to get a firm grip upon one’s conviction while ascertaining a specific direction. It is always better to look for a start point where the ‘Impulse wave’ price characteristics are easily defined. Once this step is done then entering into a trade setup becomes easy be it on either side.
For newcomers I would strongly suggest to defocus from learning indicators & oscillators in their early stages & emphasize more on thoroughly understanding the price action analysis with major weightage on learning to identify the right Japanese Candlestick formations based upon their rules of confirmation. Japanese candlestick charting & its pattern analysis equips the trader with right insights into understanding the current market psychology. It is by far the most ancient & powerful trading technique for timing the stock markets.
Are the charts telling you that the worst is over for Nifty IT index and stocks, considering the recent rally?
Nifty IT index has witnessed a massive correction from its January 2022 high of 39,446 till the reconfirmation of base around 26,186 which was established in the month of September 2022. The recent rally from this base looks like an ideal pullback move with multiple hurdles starting from 31,640 towards 33,250 (in case of any extended move). 33,250 is the historical support base from where it witnessed an acceleration in its downward momentum during its bearish phase of January to September.
Do you think the Nifty FMCG is on the verge of breakout of long consolidation seen for last 10 odd weeks now?
Nifty FMCG has been displaying negative divergence both on its daily as well as weekly scale. If we compare its current weekly swing high with its previous major swing high of September 24, 2021 when the index price swing was established near 41,820 its corresponding RSI value was at 82 while its current RSI value is placed lower at 65 despite its absolute price scaling towards 45,788.
Hence as observed in the recent past most of its breakout moves fail to gather sustained momentum. Therefore, it is better to avoid chasing any breakout moves & wait for meaningful corrective action for any near to long term entries.
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