NIFTY ANALYSIS AND WEEKLY PICKS

1 янв. 2023 г.

NIFTY ON 30-12-2022

Following the positive Global cues Index opened gap up and made the day high of 18265.25 but failed to sustain 18250 and selling pressure came from all directions which dragged the Index towards the day low of 18080.30.
The Index kept oscillating between 18150 and 18200 and both Bulls and Bears tried to bring the odds in theirs favour. It was the final hour of trading session when Bulls can’t sustain the selling pressure and finally threw the towel.
All the vital indices except METAL , PSU BANK and OIL&GAS closed in Red.
Index closed at 18105.30 losing 0.47% making a Bearish candle on daily chart.

Technical View : (Daily Chart)

NIFTY has made a long Bearish candle which indicates the further downside in upcoming trading sessions.
NIFTY is moving below EMA 13, 21and 34 and EMA 13< EMA34<EMA21 which signals that Index is still in down-trend.
RSI is below 50 level which endorses the signals coming from the above-mentioned indicators.
We had discussed in the previous post that Index has a tendency to move towards the EMA 13 from wither of the directions. A quick glance at the chart reveals that Index moved toward the EMA 13 ( which lies at 18225.02 on the trading session of 29.12.2022) and failed to sustain it.
If Index had sustained this level then it could have been interpreted that index has completed its correction and ready to move upward. However, the failure to sustain EMA 13 on daily chart also endorses that Index may further show weakness.

Support and Resistance : Daily Chart
18040-17981 will work as the first support level for NIFTY. Below this 17831 will hold strong support.
On the upper side NIFTY will face resistance in the range of 18169-18244. Above this 18300 will hold strong resistance for NIFTY.

Sectoral View: ( WEEKLY CHART)
BANK, METAL and OIL&GAS look strong where the investors may park their welath while indications of positive reversal are visible in AUTO, FMCG, IT and MEDIA which make these indices the candidates of buying.
PHARMA looks weak and further weakness may be observed during the next five trading sessions.

View for Traders:

Now this looks interesting. Technically Index is weak and there should not be any doubt about this.
But at the same time the vital indices tell a different story.
In the above section “ Sectoral View” it is mentioned that except PHARMA all other indices are either showing strength or signaling the positive reversal from current levels on Weekly Chart.
So, if all the vital indices are indicating towards positive reversal then there is no reason to remain bearish on Index for the upcoming trading sessions.
If the Index is indicating in two different directions the view can never be unidirectional and hence the author prefers to remain firm with two different views for the upcoming week.
Index may open gap down on 02-01-2023 but there are high chances that Index will alter its direction and move towards north.
Hence, under present circumstances, it seems wise to buy NIFTY on Dips rather selling at High.
Buy NIFTY near the first support level i.e. 18050 for target of 18150-18200. SL may be kept below 17975 on closing basis.
As mentioned above, it is better to find chances to buy NIFTY on Dips rather selling at High, it is not recommended to Sell NIFTY as the risk reward ratio doesn’t look favourable.

Weekly Picks

1. BALKRISHNA INDUSTRIES
BUY in the range of 2060-2080
Target 2188
SL 2015
Potential Upside 6.21%

2. HDFC BANK
Buy in the range 1590-1600
Target 1700
SL 1575
Potential Upside 6.91

3. MPHASIS
BUY in the range of 1920-1932
Target 2071
Potential Upside 7.86
SL 1885

4. TATA STEEL
Buy in the range of 106-110
Target 119
SL 99
Potential Upside 12.26%

5. INOX LEISURE
Buy in the range of 480-485
Target 520
SL 465
Potential Upside 8.33%