Nifty, Bank Nifty may see more gains, buy on dip’s the advice

Apr 1, 2024 10:27 am | News

Technical charts indicate that Nifty and Bank Nifty are currently poised for an upward trend. According to technical analysts, Nifty may ascend towards 22,800 levels, while Bank Nifty could touch 48,500 levels. Stocks such as Sun Pharma, Hero MotoCorp, Tata Steel, Britannia, Divi’s Lab, HDFC Life, PI Industries, Praj Industries, and Sona BLW have exhibited bullish structures, suggesting promising investment opportunities, said analysts.


Where is Nifty headed?
Nifty has a short-term bottom at 21,710 and has its eyes set on a new all-time high with a potential to stretch higher till 23,000–23,100 from a one-month perspective. The daily momentum indicator has triggered a fresh positive crossover which is a buy signal and also suggests that minor pull-backs should be bought into. A dip towards 22,270–22,250 support should be used as a buying opportunity for immediate target of 22,670 –22,700 during the week. A slip below 22,160 would lead to a consolidation phase; however, the probability appears low.

What should investors do?
The rally in the benchmark index shall have a rub-off effect on midcap and smallcap stocks as well, though it is likely to be selective ahead of the result season kicking off during the second half of April. We expect the positive momentum to continue in realty, infrastructure and auto, while FMCG stocks could be the dark horse for the week. Buy Britannia at Rs 4,911 with a stop loss of Rs 4,830 for a target of Rs 5,112–5,266. Buy Divi’s Lab at Rs 3,445, stop loss of Rs 3,409 for a target of Rs 3,577–3,653.

ANALYST, EMKAY GLOBALWhere is Nifty headed?
In the event the index rises above 22,500, it may experience further upward movement up to 22,700 to 22,800. Short-term bulls are recommended to hold their position above 22,000, while a mid-term stance would require a hold above 21,700. The RSI reading for Nifty is at 57, indicating room for further improvement. For Bank Nifty, its technical structure favours a bullish view as it trades within a rising channel and takes support at its long-term moving average. Bank Nifty will remain bullish if it maintains above 46,500, with the potential for reaching its alltime high level of 48,500. What should investors do?
According to the seasonal trend of strategic indices, mid- and small-cap stocks are expected to benefit at the start of April. Overall, Nifty and Bank Nifty are in positions that suggest a potential upward trend. Trade opportunities in auto, midcap and smallcap stocks may be worth exploring. Among these, HDFC Life, PI Industries, Praj Industries, and Sona BLW have bullish structures.


Where is Nifty headed?
Nifty has continuously shown a bullish price structure, which is characterised by higher-top-higher-bottom formations on monthly chart. On the daily chart, however, the rejection from the highs of 22,500 does show a strong supply zone where previously also the index witnessed profit booking. The outperformance of midcap and smallcap is heartening, showing broader participation, but there is a loss of momentum at higher levels.

What should investors do?
It’s ideal to retain the buy-on dips strategy and refrain from chasing momentum, given frothy valuations in many of the index heavyweights. Underperformance in banking stocks is likely to continue, and investors should focus on top auto and pharma stocks, which are showing signs of revival. Buy Hero Motocorp at around Rs 4,650 for target of Rs 4,800 with a stop loss of Rs 4,550. Buy Sun Pharma, target Rs 1,750, stop loss at Rs 1,580. Commodity prices continue to trade higher, which will be reflected in metal stocks. Buy Tata Steel at Rs 146, target Rs 162, stop loss Rs 140. It is advisable to have a strict stop loss strategy for the Nifty below 21,950 on a closing basis.

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