Nifty: Nifty may trade in 16,450-17,450 range: Analysts

The Nifty managed to close above the 16,750-17,000 support zone but lack of momentum hampers an upward move. Technical analysts expect the index to consolidate in the 16,450-17,450 range by October’s F&O expiration. Analysts said stocks like , , ABB, , Angel One, , and could see strength in the near term.


Where is Nifty headed this week?

Although the market staged a recovery from 16,747, the move was capped at 50% of the retracement of the 17,429 decline (18,096-16,747). FY23 consensus expectations for Nifty EPS remain broadly in a range of 850-865 meaning a 20x forward PE caps the downside and India keeps its premium. Nifty needs to cross and hold above 17430 to build strength to the upside for a rally towards 17632-17900. If you break below 16,747 expect a drop towards 16,360 and then 16,080. Until then, the market should remain in a broad range of 17,450 -16,450 sideways and consolidate.

What should investors do?

Stay invested in quality names and add dips. We like stocks like

, poised for a breakout after 18 months of consolidation. Expect Sun Pharma to continue outperforming. In the festive and wedding season, titanium should do well. Small caps, IT and GHCL in commodity chemicals continue to show strength.


Where is Nifty headed this week?

The current volatility is such that we have only seen gap up and gap down opens for the past few days and such markets are very difficult for any directional trader. By October’s expiration, we’ll likely see a wide range. 17,380 will act as a strong resistance and the supports are at 16,800 and 16,650.

What should investors do?

The sustained and significant rally can only come with foreign institutional participation in the cash segment. We recommend NMDC as a long bet for the Demerger game with a target of 7% and a strict 3% stop loss. ABB and TVS Motor can see another 4% to 5% gains higher this week as these two stocks are expected to join the MSCI index next month. According to our internal quantitative model, we like Divis long and Sun Pharma short with a target of 6% and a stop loss of 2.5%. As a position bet, Zee Entertainment can accumulate to around 245-250 odd levels.


Where is Nifty headed?

Nifty ended the week flat and continues to hold above the 21-week EMA, but is trading inside the broadening wedge pattern. On the chart with minor degrees, the index appears to be consolidating in a wide range (16,800-17,400) and the index must immediately stage a price intense move above 17,250 to show bullish intent. The market has had record short positions since Friday and only a subsequent move above 17,400 is likely to trigger short covering.

What should investors do?

The overall trend remains positive and investors should “buy the dips” as long as 16,800 is sustained on a closing basis. bank stocks like

, AU Bank and First have more steam. Sector rotation points to value buys in L&T Infotech, , , and Sun Pharma. could make a comeback as we try to replicate the corrective move. Stocks like Angel One, KRBL, and Deepak Nitrite have good setups with decent risk/reward ratios. Nifty: Nifty may trade in 16,450-17,450 range: Analysts

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