GAURAV BISSA VP – TECHNICALS AND DERIVATIVES, AT LKP SECURITIES
The Nifty is witnessing a roadblock. The uptrend, however, remains intact. On daily charts, the Nifty witnessed a recovery from 15,450 levels which is nearby the previous swing high which should now act as good support. The index is expected to trade with a cautious approach. A rise toward 15,800-15,820 will act as a hurdle with the possibility of a further dip. However, until Nifty holds 15,400, this fall is likely to be only a temporary retracement in the uptrend.
What should investors do?
Investors and traders should trade with caution in such markets and avoid entering stocks that are giving breakouts as weak Nifty and midcap index can clip their wings. During this time, good quality stocks that are witnessing retest of breakouts should be entered into. For example, Bayer Crop and Britannia have made a nice retest on weekly charts and bounced with strong relative strength charts. Such setups provide a fair degree of safety along with potential upside.
DHARMESH SHAH HEAD-TECHNICALS, ICICI SECURITIES
Is the Nifty headed further down?
We expect the Nifty to consolidate with a positive bias in a broad range of 15,400-15,900 in the coming week, thereby establishing a higher support base. Our broader outlook of 16,100 remains intact.
What should investors do?
The current episode should not be construed negatively as a larger uptrend remains in place. Sticking to quality is a mantra to ride such a volatile period. Investors should therefore use dips towards 15,200-15,400 to their advantage to accumulate quality large caps and midcaps. Our preferred large-cap picks are Infosys, HDFC Life and Tata Motors with an upside potential of 6-9% over the next quarter. In midcaps, we recommend accumulating Mindtree, Nocil and Caplin Point Labs for 12-15% gains over the next quarter.
ABHILASH PAGARIA ASSISTANT VICE PRESIDENT, EDELWEISS ALTERNATIVE RESEARCH
Is the Nifty headed further down?
In the expiry week, markets should trade in a broader range of 15,400 and 15,800. The level of 15,450 assumes importance as critical support, below which weakness will resume with bigger damage to the index constituents.
What should investors do?
As we are expecting markets to trade in a range and one can look to initiate a Short Strangle Option strategy by selling 15,400 Put and 15,800 Call as -well for June 24 expiry. Within sectors, with sliding copper prices we expect metals to continue to be under pressure. Hindalco is our top pick for creating a short position for 7-8% correction. On the long side, Info Edge should gain momentum and Hindustan Unilever should continue to outperform heavyweights.
