Sacchitanand Uttekar, DVP – Technical (Equity), Tradebulls Securities
“The current data still supports the fact that the psychological support around 17,500 would come under jeopardy due to its close proximity to its 200-day EMA (exponential moving average) level of 17,485 which could be marked as key support zone for the ongoing bearish move,” Sacchitanand Uttekar of Tradebulls Securities says in an interview to Moneycontrol.
On the Bank Nifty, the VP-Research (Derivatives and Technicals) with 16 years of experience in analysing Indian capital markets via its financial data feels the possibility of a decline towards 41,000-40,330 zone remains high but a breach below 40,000 level immediately looks unlikely.
In case of the PSU Bank Index, Uttekar says since the rally has been vertical and its monthly RSI (relative strength index) trending in its overbought territory at 75, it is ideal to remain cautious & wait for a pullback towards 3,800 to add further longs.
Do you think the Nifty will break its crucial support of 17,500 mark in coming sessions?
Since the beginning of the December series, we have been of the opinion that the Nifty would slide back towards 17,580 as the odds then for an up move towards 19,000 looked unfavourable. The current data still supports the fact that the psychological support around 17,500 would come under jeopardy due to its close proximity to its 200-day EMA (exponential moving average) level of 17,485 which could be marked as key support zone for the ongoing bearish move.
Is it really a great time to pick quality stocks or should one wait for some more time to get the dust settled down?
Nifty has merely corrected by 5 percent from its recent top. On its weekly scale, the ‘Flat Wave’ observation is indicating an eventual decline towards 16,772. On its monthly scale, we are observing a major candlestick reversal formation viz. The ‘Bearish Engulfing’.
The pattern has occurred at the significant resistance zone after a rally of 5 months. As per the basic retracement tool analogy the index is schedule for a minimum move towards 17,205 (78.6 percent retracement of its prior Impulse wave) once the index slides below the 17,580 level.
Also, as per seasonality data historically the months of January & February have delivered a negative return as per their respective past 5 months % average returns where the index only saw a significant up move in February 2021 else the rest of the months have been on the negative side. Hence it may take more than a few weeks for the dust to settle down & a clear buying trend to emerge.
Do you see any possibility of Bank Nifty falling decisively below 40,000 mark?
Possibility of a decline towards 41,000-40,330 zone remains high but a breach below 40,000 level immediately looks unlikely. The key retracement support (78.6 percent retracement support) of its prior impulse move from 37,386 to 44,152 is placed around 39,970 level itself in close proximity to that 40,000 mark.
All sectoral indices slipped into red in the last one month, but PSU Bank index managed to outperform them. Do you expect significant rally in the space and should one add more positions in the segment?
PSU Bank Index ended the year 2022 on a high note as it scaled above its 2011 high of 4,639 for the first time in 10 years. Since the rally has been vertical & its monthly RSI (relative strength index) trending in its overbought territory at 75; it’s ideal to remain cautious & wait for a pullback towards 3,800 to add further longs.
Can you share your best learnings from 2022 and strategy for 2023?
On the weekly time frame, we are observing a ‘Flat Wave’ corrective pattern with its ‘C- Wave’ in progress. The pattern which seems to have commenced on October 22, 2021 marking the high of 18,604 could see a conclusion in the mid of 2023. Hence the strategy for the year is to accumulate quality stocks once the index is near 16,700 zone with an anticipation of the up move to resume again in the 2nd half of the year. We expect the consolidation to be corrective action for most part of the year very much similar to what we saw in 2022.
Will the India VIX be moving above 20 mark in January?
India VIX has already started its upward trending move after declining for almost 4 months in a row. Odds of a sustenance above 20 mark remain low but the regime may shift higher from the existing band of 12.50-17.50 to 17.50-20.50 in the coming month.
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