Rajesh Palviya of Axis Securities
“Nifty IT has strong resistance between 31,500 and 31,800 levels, which is likely to act as a strong resistance zone and upholding the same will only indicate up move in the sector whereas overturn from the same will indicate a double top,” Rajesh Palviya, Vice President – Research at Head Technical & Derivatives at Axis Securities says in an interview to Moneycontrol.
So for the short-term trade, he feels there is still some steam left and stocks like TCS, Persistent Systems and HCL Technologies are likely to lead the sector.
Palviya, who has over 20 years of professional experience in the financial services industry, says the major trend deciding level for the Nifty is 18300 on the higher side. Any strong close above this level may create a stronger momentum on the upside that may eventually lead the index to surpass its previous highs, he adds.
Do you think one should start taking exposure to consumer durables stocks as the entire index was under pressure since September last year?
The Consumer Durables Index was in a strong uptrend between June 2022 and September 2022. It touched the peak level of 8,147 in September 2022, and after that, the index went into corrective mode. It retraced up to 50 percent (7,255) of the entire rally (6,364-8,147) and now it has been consolidating above the crucial support zone of 7,300-7,250 levels for the last month.
Any weekly close and breakout above 7,500 levels will result in the continuation of the prior uptrend and can be used for taking exposure in the stocks such as Blue Star, Titan Company, Voltas, Havells and Bajaj Electricals with the medium to long-term perspective.
Is the market gradually inching upwards towards a record high considering the current charts set up or is it looking difficult for the Nifty50 to get back to a record high by the end of this financial year?
On the longer-term charts, Nifty is still in a bullish mode. However, the index has been consolidating between 18,700 and 15,600 since October 2022. Currently, the index is firmly placed above its 200-day SMA (simple moving average) support of 17,323 level, which also indicates short-term bullishness in the markets.
The major trend-deciding level for the Nifty is 18,300 on the higher side. Any strong close above this level may create a stronger momentum on the upside for the index that may eventually lead the index to surpass its previous highs.
Nifty Healthcare has been making lower highs and lower lows since November, and now in February, there is a higher high and higher low. Do you expect the northward journey to continue and is it looking attractive now?
Nifty Pharma formed a top in the first week of October 2022 at 14,938 and got into a correction. The index is forming a falling channel pattern. It is holding an above 38 percent Fibonacci retracement of the rally from 6,242-14,938, which is placed at the 11,650 level.
The index is currently in a corrective phase and trading in a falling channel. A decisive weekly closing above the upper band of the falling channel, which is placed at 13,000, will change the trend and the bias will turn positive.
Nifty IT has given a nice rally in more than a month period. Will the rally continue towards a record high given the index is trading above all key moving averages or is there any possibility of double top formation?
Top-tier IT companies posted a robust set of numbers led by large deal wins and notable demand for digital transformation. Nifty IT has gradually moved up after taking support at 50 percent retracement on monthly charts at 26,000 levels and sustaining on a closing basis above the 32,000 levels will augment the uptrend from a long-term perspective.
Currently, at 31,054, Nifty IT has strong resistance between 31,500 and 31,800 levels, which is likely to act as a strong resistance zone and upholding the same will only indicate an up move in the sector whereas an overturn from the same will indicate a double top.
So for the short-term trade, there is still some steam left and stocks like TCS, Persistent Systems and HCL Technologies are likely to lead the sector.
Do you expect the rangebound and consolidation to continue in Bank Nifty for the rest of the financial year as it is finding it tough to sustain above 42,000?
Q3FY23 was another robust quarter for banking stocks led by improving credit growth, asset quality and return ratios, which will lead to the rerating of the valuation multiples. On daily charts, Bank Nifty is trading between its 50 and 200-day moving average, indicating overall positive bias with some caution; however, the immediate consolidation range of 42,500 on the upside and 39,500 on the downside is likely to continue due to the ripple effect amid concerns over banking exposure to the Adani Group.
On the other hand, rising interest rates are also impeding the sector, hence for a definitive trend, Bank Nifty needs to either move and sustain above 42,500 for an uptrend or close below 39,500 for a downtrend.
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