NSE Nifty 50 has fallen substantially from its all-time higher of 15,431 in the month of March. However, the index did not break its 50 days EMA, which has acted as robust help given that May final year. Domestic brokerage firm ICICI Direct believes the healthful retracement from February highs now provides investors a fresh entry point, expecting the index to scale back to all-time highs in the coming months. “We expect the index to hold the strong support of 14,400 and gradually retest lifetime highs of 15,430 in coming months,” ICICI Direct stated in a report.
The index has corrected on an typical of 9% on every single retracement just before bouncing back strongly. The current correction, in ICICI Direct’s view, has helped the index to cool off the overbought situation. The brokerage firm expects domestic markets to mirror created markets, which are trading close to all-time highs, and therefore expects a bounce back. However, a decisive close under 14,400 would disrupt the rhythm and extended correction will unfold, they warned.
Broader markets in excellent shape
Opportunities are also galore in the smallcap and midcap space. The Nifty Midcap one hundred corrected 9% from its current higher, comparable to previous corrections. The index has held above 10-week EMA given that June 2020. “We expect strong positive correlation with developed market peers to remain intact for the midcap index as US index forming a higher base around fresh life-time high,” ICICI Direct stated. Meanwhile, the Nifty Smallcap one hundred index is nevertheless 15% away from all-time highs. The smallcap index corrected 8% from current highs, which now delivers fresh purchasing chance.
Bank Nifty has corrected from its Budget highs but is anticipated to hold above robust help zone of 32,600-33,000 and witness a pullback towards 36,500 in the coming month, according to ICICI Direct.
IT, Banking, FMCG to outperform
Among sectors Information Technology, Banking, and FMCG stay outperformers on the charts. IT stocks took a breather for two months and are now sitting in the outperformer quadrant. Bank stocks galloped right after the price range but now right after a firm correction are anticipated to resume uptrend. FMCG stocks, ICICI Direct stated have been in the ‘bargain buy’ quadrant but are now outperforming and are most likely to continue carrying out so. While commodity cycle is the buzzword on Dalal Street, the brokerage firm expects metal and capital goods stocks to now consolidate right after getting been outperformers.
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