Nifty: Bullish patterns hint at further upside, Nifty may touch 22,500: Analysts

Most of the technical charts show a bullish pattern, which suggests that if Nifty maintains levels above 21,800, it can reach 22,500. Alternatively, according to technical analysts, support is seen at 21,600 levels.

He saw positive setup in various stocks including Maruti, TVS Motor, ACC, Biocon, Tata Motors, M&M, Persistent, Ambuja Cements, Adani Ports, Federal Bank, Trent and Indian Hotels.

Chandan Tapadia
Analyst-Derivatives, Motilal Oswal Financial Services

Where is Nifty going this week?
Nifty has formed a bullish candle on the weekly scale and recorded the highest weekly and second-highest daily close, which indicates that bulls are dominating the higher zones. The index respected its 61.80% retracement (21,515) of the recent overall move (21,137 to 22,126) and moved higher with the formation of a higher top – higher bottom. Indicators are also indicating bullishness on daily and weekly scales. As long as it sustains above 21,800, a new phase of rally can be seen till 22,201 and 22,500. Key support exists at 21,515-21,600.

What should traders do?

India VIX has declined from the recent high of 16.57 with put-call ratio increasing as continuous put writing was seen at 22,000. With the positive trend in the global equity market, the FII index long-short ratio is moving higher from the lower areas, which may sustain the trend in the domestic market. There is a bullish atmosphere in the auto, IT, CPSE, power, and energy sectors. Positive setup is being seen in Maruti, TVS Motor, Tata Motors, M&M, Persistent, Ambuja Cements, Adani Ports, Federal Bank, Trent and Indian Hotels.

Ajit Mishra
SVP-Research, Religare Broking Where is Nifty going this week?
Nifty is trading in a wide-ranging pattern and is set to test its record high. We are eyeing stability above 22,150 for the resumption of the up-trend and move towards 22,500. Support has shifted to 21,450-21,700 areas. The improvement in banking giants combined with rotational buying in other major indices has raised hopes of a possible breakout attempt. However, mixed global signals may continue to weigh on sentiments and may trigger sharp reactions at times.

What should traders do?
Since most sectors are now in line with the benchmarks, participants should continue with the ‘buy on dips’ approach and focus on stock selection. ACC has again achieved record highs and is growing rapidly. Biocon is attempting trend reversal. Chambal Fertilizers has made a new pivot for the next phase of growth. Granules, which hit a record high, have seen a consolidation with noticeable volume. L&T is preparing for a reversal after a minor decline, which can be gradually accumulated.

Pritesh Mehta
Executive Vice President, Yes Security

Where is Nifty going this week?
Although the set-up has been positive, Nifty is yet to confirm a break beyond the range of 21,600-22,100. Both the Financial Services and Bank Nifty indices have helped in the recent rally. A study of the relative strength of these indices against Nifty shows that the ratio is attempting to retreat from a key support zone. If a similar trend continues, the performance of these indices (i.e. the components within these indices) will be better than that of Nifty. Bullish follow-up of the ongoing broader pattern is required for Nifty to move towards the 22,300 zone.

What should traders do?
Bank Nifty and financial indices have formed a short-term base after a prolonged period of underperformance. Stability in ICICI Bank and HDFC Bank is likely to support bullish sentiment; The follow-up moves are expected to continue for Bank Nifty with crucial support at 45,000. After a brief pause, the Nifty PSE index reclaimed its previous peak of February 24 with double-top buying, indicating fresh action in the sector. GAIL, IOC, and NTPC are bullish, indicating a rally of 10-12% in the near term.