By Rajesh Palviya
The upcoming Union Budget will be an significant occasion which will define the future trend in the industry especially simply because of the disruption brought on by COVID19. The index has noticed a robust rally in the month of January, registering a new all-time higher of 14753 levels and closed at 14238. Since March 2020, the index surged pretty much 96% in the previous ten months, producing it one of the strongest gains in current instances. Since the previous two consecutive weeks, the index continued to kind a “Spinning Top” candlestick pattern, which signals a quick term pause in the current uptrend or trader’s indecision at the existing juncture.
However, the index manages to hold and sustain above its ten months Up-Sloping Trendline, indicating that the trend is nonetheless intact and a pullback (if any) need to be applied as a acquiring chance. Going forward, big help is at 14000-13700 levels. On the weekly and month-to-month chart, the RSI has entered the overbought territory, which indicates that the momentum is really robust as of now. Most of the sector has noticed robust bullish momentum make-up.
Sensex managed to touch a historical level of 50000 and witnessed profit booking from a greater level. Sensex lengthy term chart is in bullish territory and indicates that till Sensex does not break under 47000-46500 level lengthy term is going to stay bullish and Sensex can rally additional towards 51000-52000 in the coming months.
Nifty is sustained and displaying uptrend across all the time frames. Though our bias nonetheless remains positive, we observed some early indicators of profit booking in this overstretched rally, therefore the traders are advised to wait and watch for quick term corrections to make fresh longs. As the Union Budget is close to, we can count on volatility into numerous sectors /stocks which can trigger intense moves on either side. From existing levels, the quick to medium-term trend nonetheless remains intact and the bulls continue their bullish command into the markets towards 15000-15300 levels. On the downside, quick help is placed about 14000 levels. However, any violation of this help zone on a closing basis could bring about quick term correction towards 13800 levels. Major help zone on the lengthy term chart is placed at 13500-13200 levels.
Bank nifty witnessed resistance about its various provide zone of 32600-32800 levels considering the fact that the final two weeks, indicating a cautious strategy at existing levels. Major trend nonetheless remains intact, the bullish medium-term trend nonetheless remains intact and the bulls continue their bullish command into the markets towards the 32800-35000 level, a pullback (if any) need to be applied as a acquiring chance. Going forward, big help is at 30000-28900 levels.
Historical information suggests that the industry could give a swing of 5-8% pre /post-price range at present, the industry trend is particularly bullish, so any corrective action need to be applied as a acquiring chance.
We count on the Auto, Pharma, FMCG, Capital goods and Power sectors to do properly, as most of them have noticed a fantastic accumulation and bullish breakout ahead of price range.
(Rajesh Palviya is Head Technical & Derivatives Research, Axis Securities Ltd. Views expressed are the author’s personal.)