Sagar Doshi of Nuvama Wealth
“Looking at technical patterns on long-term charts (monthly negative divergence) and signals coming from the yield curve (inversion of 80 percent), this Nifty upmove looks like a retracement for next fall,” Sagar Doshi, the Head of Technical, Wealth Research at Nuvama Wealth and Investment says in an interview to Moneycontrol.
Overall bounce till 17,800-18,000 is the maximum possible, but it doesn’t seem to surpass the new high, he believes.
Nifty CPSE and Nifty PSE sectors are one of the outperformers in recent times. A multi-year breakout from consolidation suggests that this sector will lead and remain an outperformer in the near future, says Sagar Doshi with over 13 years of research experience in equity, forex, and commodity markets.
Is the Nifty ready to surpass the record high in March?
Short coverings till 17,800-18,000 look possible as record high selling from FIIs and the highest short position in the index, which is above 1.3 lakh contracts by FIIs, are set to reverse.
But looking at technical patterns on long-term charts (monthly negative divergence) and signals coming from the yield curve (inversion of 80 percent), this upmove looks like a retracement for next fall.
Overall bounce till 17,800-18,000 is the maximum possible and it doesn’t seem to surpass the new high.
Bank Nifty also got back into action after recent developments. Do you see it at fresh record high in the current month series?
It has been observed that historically March is the highest volatile month, compared to any other month. Bank Nifty looks stronger compared to Nifty, but a record high in any index in the near future is unlikely. Bank Nifty is set to bounce to 41,800-42,000 levels.
Sonata Software is the biggest gainer with 40 percent rally in the Nifty500. Do you expect the run to continue or is there any kind of near-term profit booking?
After a sharp run-up in prices, the stock is forming a negative divergence. Negative divergence in weekly and daily prices is a sign of distribution and pause in the current move.
Any close below Rs 750 may trigger some profit booking towards Rs 680.
Do you think the current consolidation in Persistent Systems indicates some kind of preparation to make a march upward in coming sessions?
Weekly and monthly charts are showing negative divergence whereas, the daily chart is forming a potential head-and-shoulder pattern. A close below Rs 4,750 will trigger a sharp selloff.
It clearly shows that any uptick in prices will be faced with further selling pressure.
Which is the one sector that you want to bet on with full strength?
Nifty CPSE and Nifty PSE sectors are one of the outperformers in recent times. A multi-year breakout from consolidation suggests that this sector will lead and remain an outperformer in the near future.
Any thoughts on Nifty Energy and Nifty Metal, which are key losers this year?
After a sharp fall in both indices of more than 30 percent, recent moves look like short coverings and a further 5 percent covering is possible, but it would remain a bear market retracement.
After pulling back, metal is set to fall for another 20 percent, so it is likely to remain weak for 2023.
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