It’s buy-the-dips time; Nifty support at 22,300

Where is Nifty headed this week?
Amid high volatility last week, indices retested the support zone at 21,825, which was closer to the previous three swing lows of February, March and April 2024, and after that, witnessed a strong rebound leading to a close above 22,500 with a gain of 2%. Chart patterns suggest that a 20-day exponential moving average of 22,200-22,250 will act as crucial support going forward, and a possibility of between the 22,200 and 22,800 zones looks more likely. Above 22,800, a fresh move up to 23,100-23,150 can be witnessed. Weekly options data coupled with India VIX sustaining at higher levels suggests possible consolidation for Nifty within the 22,200-22,800 range for the week.

What should Investors do?
While the short-term bias in Nifty is positive, we feel stock-specific action could continue in quality mid-caps and small-caps. We expect large-cap names from select private as well as power, capital goods, metals, defence, CPSE, as well auto to outperform going ahead. Positive trade setup is visible in select large-cap names such as M&M, TVS Motors, Coal India, Grasim, and ACC. Among the mid-caps, stocks like Gail, Concor, National Aluminium, Exide, BDL and RVNL could continue to witness strong buying interest.


SAMEET CHAVAN
HEAD RESEARCH - TECHNICAL AND DERIVATIVES, ANGEL ONE

Where is Nifty headed this week?
Nifty levitated above its significant EMAs with strong participation from broader markets, especially the Midcap index, which registered its lifetime high. However, Bank Nifty still lacks conviction and its participation is crucial in strengthening the momentum. The 22,350-22,300 level is likely to cushion any Nifty intra-week blips, followed by the sacrosanct support of 22,200 in the short term. On the higher end, 22,600- 22,650 remains a sturdy resistance before Nifty could claim its lifetime high of 22,800.

What should investors do?
As far as stock specific ideas are concerned, we like APL Apollo for this week. With Friday’s strong upsurge, the stock has broken out from the congestion zone. In addition, the volume of activity has been decent for the last 2-3 sessions. We recommend buying for a target of Rs 1,822 with a stop loss at Rs 1,602. We expect some catch-up move to happen in MTAR Tech. Technically, the stock seems to have formed a strong base around Rs 1,600 odd levels; and on Friday, we witnessed the first sign of trend reversal. We recommend buying on a decline at around Rs 2,000–1,980 for a target of Rs 2,200. The stop loss needs to be placed at Rs 1,880.

RUCHIT JAIN
LEAD RESEARCH, 5PAISA.COM

Where is Nifty headed this week?
Nifty formed a support base recently, around 21,800, and has resumed its uptrend as dips are getting bought, and the market breadth remains strong. The RSI on the daily and the weekly charts are positive, hence, the momentum remains positive. FIIs still have significant short positions in the index futures as their ‘Long Short Ratio’ is around 28%. If the uptrend continues, then they could look to cover these shorts, which would add fuel to the rally. INDIA VIX continues to be at higher levels owing to the event (elections), but markets will factor in the event outcome soon, and the volatility will start cooling off.

What Should Investors Do?
The immediate support for Nifty is placed around 22,300, followed by 22,100-22,000 and any dips should be seen as a buying opportunity. The index could attempt to rally towards new record highs soon. Stocks such as Aurobindo Pharma and HEG are hinting at a continuation of uptrend, while IEX (above Rs 162) and Shyam Metal (above Rs 650) are on the verge of breakouts. Traders can look to buy these names with a stop loss placed below their 20-DEMA for potential 5-8 % returns in the near term.