Nifty: Large corrections unlikely, but 14,250 support crucial

Technical and derivatives analysts say the Nifty index is likely to find major support at 14,250 level. The market sentiment continues to be weighed down by the record daily surge in coronavirus cases but analysts believe that big corrections are unlikely unless the index breaches the above level. Stock indices fell 1.5% last week and are down 7% since record high levels that were hit in mid February. Technical analysts see the broader index facing resistance at 14,900 and 15,000. The Nifty ended up 36.40 points, or 0.25%, at 14,617.85 on Friday.

SIDDARTH BHAMRE
DIRECTOR-ALTERNATIVE INVESTMENTS & RESEARCH, INCRED CAPITAL

Is the Nifty likely to fall further?
Nifty has respected strong support around 14,250. Unless 14,250 is breached, we should refrain from talking about big corrections. Only if the index falls below 14,250, the negative implications of last month’s bearish Nifty candlestick may begin. Statistically too, aggressive shorts in Bank Nifty futures have been squared off. Fresh positions are a blend of long and short. On the other side, at around 14,900 supply has been coming in.

What should investors do?

Long-term investors should remain invested with orientation more towards defensive space as even from a shorter-term perspective we are seeing more buying interest in the pharma space. Short-term traders should watch out for any breach of 14,250 support or resistance of 14,900 to form aggressive positions

PRITESH MEHTA
LEAD TECHNICAL ANALYST-INSTITUTIONAL EQUITIES, YES SECURITIES

Is the Nifty likely to fall further?

Support of the 100-day moving average, respite around the low of March 25, 2021, and participation of Bank Nifty add credibility to the recent low of around 14,250; the level is expected to act as a base in the near term. On Friday, Nifty entered a bearish gap zone (14,653-14,786) and came off day’s high. Fresh momentum would be seen once the index sustains above 14,800. In the near term, we expect grinding activity (i.e. 14,250-14,800).

What should investors do?

P&F (point and figure) ratio charts of pharma, Nifty show a series of double-top buy patterns and bullish anchor follow through, implying outperformance of pharma, especially Aurobindo, Cadila and Torrent Pharma. Nifty Midcap took a tumble recently, yet our P&F customised breadth bounced back sharply post the recent correction, implying strength.

SRIRAM VELAYUDHAN
VICE PRESIDENT-ALTERNATIVE RESEARCH, IIFL SECURITIES

Is the Nifty likely to fall further?

The risk of indices falling further has reduced for the time being. In fact, Nifty taking support near the 14,250 levels thrice in last four weeks is a pretty encouraging sign as it mirrors accumulation around these levels. The index is likely to trade in a range of 14,300-15,000. Financials will hold the key for further direction as traces of strength or weakness can drag the index higher or lower, respectively.

What should investors do?
Amidst market volatility, IT and pharma can be relatively safer bets. Stock specific, we like HCL Technologies and Cipla as the short-term momentum seems to be on the upside.