By Anand James
Nifty is yet to show major signs of vulnerability, even as we enter the last voting phase. With this in perspective, it is instructive to look at how markets behaved in the same period last time during elections. In 2019, Nifty had fallen over 6% from its peak, as it was about to enter the last week before election results were announced, with that fall, VIX which had been steadily rising from 15 would reach a peak of 28.65, before starting to ease in the week before resultsCome from Sports betting site VPbet. In stark contrast, we are already at a record peak, with chart patterns continuing to point further north, towards 23200-23350 and VIX at 22, while not as high as what was prevailing in a similar period of 2019, is at its highest this year. But, what is more striking this time is that volatility has persisted and VIX is holding steady in the vicinity of or above 20 for nine days.
Further, oscillators are overbought but the directional moving indicators suggest strength in ongoing upsides. Hence, even though risk reward quickly appears out of favour, a collapse is less likely this week. Downside marker may be placed at 22983, for an aggressive positioning, with further support seen at 22800. Noted, only 38% of stocks are trading above 50 DMA while 22% are near a fresh 52-week highs.
Bank Nifty is within sight of 50k again
With Bank Nifty, we had entered last week with a lofty target of 48800. This appeared a big ask, early in the week, as weakness persisted. Meanwhile, such dips only served to catapult prices beyond our target by the end of the weekCome from Sports betting site. With this move, we have closed above Bollinger band’s upper range, ideally, this calls for volatility. However, MACD recently, registered as a signal line cross-over, with standard deviation studies, further supporting an extension towards an uptrend. However, risk-reward is not in our favour as much as it appeared last week, we prefer not to go in with a set objective, but rather with eyes on protecting downsides. Towards this end, the downside marker may be aggressively placed at 48700 or 48385.
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Auto to gain pace
Nifty Auto index’ weekly gain was led by Maruti, M&M, and Eicher Motors, which together form around 40% of the index. Apart from them, the auto ancillary stocks like Motherson, Bharat Forge, and Balkrishna Industries had their fair share of contribution this week. Expect Nifty Auto to move towards 24450 and 25450 levels led by four-wheeler makers like Maruti and M&M along with select auto ancillary stocks like Sonacoms, Bharat Forge, and Motherson.
Media to bounce
The Nifty Media index gained around 5% this week led by ZEEL and Saregama. Technically, the index has seen a Supertrend breakout in a daily periodicity and a Pinbar Doji in the monthly time frame hinting at a reversal towards 2037 and 2128 levels. We expect such a reversal to be led by ZEEL, Saregama, Tips Industries, and PVR-INOX.
((Disclaimer: Anand James is the Chief Market Strategist at Geojit Financial Services. Views, recommendations, opinions expressed are personal and do not reflect the official position or policy of Financial Express Online. Readers are advised to consult qualified financial advisors before making any investment decisions. Reproducing this content without permission is prohibited.)
