"The rollover data and slightly lower roll-cost suggest that meaningful declines could be bought into but the market range can shift lower with a capped upside after the recent price action," Chandan Taparia of Motilal Oswal Financial Services tells Moneycontrol in an interview.
The Vice President, Analyst, Derivatives, at MOFS, feels the Nifty needs to hold the 17,777 level to witness an upmove towards 18,250.
The Nifty metal index is trading near the life-time high zones and has a relative strength with bullish momentum. It witnessed some decline in the last four days, but the major trend is positive, says Chandan, with more than 10 years of experience in equity research.
What do you make out of the F&O expiry day data and what is your observation with respect to the trend in February, on the basis of monthly expiry?
The Nifty50 has been consolidating between 17,777 and 18,250 in the last 20 trading sessions. Declines are being bought into but follow-up activities are missing at higher levels.
It made four attempts for a range breakout on the higher side in the last five weeks but lack of buying interest took it back to the 17,777-17,850 levels.
It closed the January series with a 1.64 percent loss and corrected by around 300 points on an expiry-to-expiry closing basis -- from the 18,191 to 17,891 levels. It failed to break the falling supply trendline by connecting its higher peaks of 18,887, 18,696 and 18,201 zones.
The Nifty needs to hold the 17,777 zone for any kind of bounceback and relief in market sentiment after the recent price structure.
The rollover data and slightly lower roll cost suggest that meaningful declines could be bought into but market range can shift lower with a capped upside after the recent price development. The Nifty needs to hold the 17,777 zone to witness an upmove towards 18250, and then towards the 18,444 zone. A failure to hold 17,777 could open the downside towards the 17,500-17,350 zones.
Do you expect the Nifty IT to respect the 30,000-mark, going ahead?
The Nifty IT index witnessed a good recovery in this series by gaining around 5 percent after the declines in the last series. It witnessed a decent upmove -- from the 28,300 to the 30,500 zones --- in the last eight trading sessions.
We believe it may find support near the 29,700 zone to witness an upmove towards the 31,000 zone. Major contributions were seen from stocks like HCL Technologies, TCS, Persistent Systems, Coforge and Mphasis.
Considering the weekly and monthly charts, do you see any possibility of the Nifty Bank breaking the 40,000-mark in the coming weeks?
Bank Nifty underperformed the Nifty in this monthly series as it closed negative by 3.71 percent on a series-to-series basis and corrected from the 43,252 to 41,647 zones.
The Bank Nifty, which was consolidating in a range, has witnessed a sharp decline in the last two trading sessions and corrected by 1,500 points from higher levels. It closed at the lowest levels in the last 50 trading sessions.
Bank Nifty, which has outperformed the broader market in the last year, has taken a set-up recently, which is giving some concern to the Indian market, ahead of Budget 2023. It has a major support near the 41,500 zone. If it holds below this level, the index would move towards the 40,800 and 40,500 zones. The resistance is at the 42,222 zone.
Why are these momentum indicators – RSI, Stochastic RSI, and MACD --important for taking a trade decision?
Most of these indicators help to get the strength or weakness of prices to get better judgements. RSI is a leading indicator or oscillator, which is being calculated with a 14-day window, based on it gaining strength.
RSI (Relative Strength Index), works as an important tool to get the overbought/oversold, bullish or bearish divergence and crossover signals with its average line.
Stochastic RSI is comparatively a fast indicator, compared to the RSI and the MACD because of its method of calculation. Stochastic RSI is calculated by its recent position from the lows to its trading range of the calculated days.
MACD means Moving Average Convergence Divergence. It is calculated by the difference between the 26 DEMA (days exponential moving average) and the 12 DEMA, and then plotting the average of 9 days with it to get a slow line. It helps to get the overbought/oversold zones, centreline crossover and divergence.
These indicators help to understand the strength and weakness of price movements, along with the existing trend setup.
Rajesh Exports is the biggest gainer in the Nifty500 index in the last one month. Do you expect the trend to continue and the stock to hit the Rs 1,000- mark in the coming days?
Rajesh Exports has rallied well this month and has been making a higher top, higher bottom formation on a daily scale. It is making a rounding formation pattern on the monthly chart and a small follow-up buying could take it towards its life-time high of Rs 994.
The Nifty metal index hit a record high recently, followed by a reversal of some gains. Do you expect the momentum to continue, and will the index surpass the 7,000-7,200 levels soon?
The metal index is trading near its life-time high zones and has a relative strength with bullish momentum. It witnessed some decline in the last four days but the major trend is positive. If it holds above the 6,500 zone, it can head towards the 7,000 zone.
Disclaimer: The views and investment tips by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
