Any dip towards 24,500-24,700 should be looked at as a buying opportunity: Dharmesh Shah
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AVP-Technical Analyst,, says the way the market breadth seems to be improving, supported by global setup, Nifty is expected to head towards 25,500 which is the upper band of the channel and should get a breakout above 25,100 and we should look for a target of 25,500 in June. Strong positional support is placed at 24,200- 24,500. Any dip towards 24,500 to 24,700 should be looked at as a buying opportunity The market has been consolidating in this range of 24,200-25,100 in the last few trading sessions, but we should not forget that we had already seen a 14% rally from the bottom of 21,800. We believe this consolidation makes the markets more healthy and we believe such consolidations are always supported by the next leg of upside.The way the market breadth seems to be improving, supported by global setup, we expect Nifty to head towards 25,500 which is again the upper band of the channel and should get a breakout above 25,100 and we should look for a target of 25,500 in June. Strong positional support is placed at 24,200- 24,500. Any dip towards 24,500 to 24,700 should be looked at as a buying opportunity.Also, if you look in the current context, the rallies are getting bigger and the falls are getting smaller and smaller. So, elongation of rallies supported by shallow retracement indicates the robust price structure. We believe any dip towards 24,500 to 24,600 should be looked at as a buying opportunity for a target of 25,500.If you look at the market in the current context, we believe banking as a sector has been consolidating for the last six weeks after a sharp move. It has been consolidating in this range of 53,000 to 55,000. We expect the Bank Nifty should be in focus in the coming week where you also have RBI policy, so more focus towards the rate sensitive sectors.I believe we should be looking for a target of around 57,000 from the Bank Nifty perspective. Apart from banking, auto and real estate which are part of the interest rate sensitive sector should be in focus. So, banking, auto, real estate, metals are the ones where we remain positive.If you look at the market broader, when your broader market is also doing good and if you see the individual sectors, you do not see any weakness in much of any of the sectors. So, maybe, it is the only sector where you have lots of news flow floating in terms of global. That is something where you have a very mixed picture where largecaps look more comfortable compared to the midcaps. IT and pharma seem to be impacted by global news flow, and should be avoided. But otherwise one can be positive on most other sectors going forward.ET Now: Help us with your stock picks. Any particular stock that is standing out for you.Dharmesh Shah: Yes, inside the metal, we remain positive on metals where HEG remains to be our top pick. If you look at the metal index, again the index is finding a support at the long-term rising trend line in metal index and also if you look particularly inside the metal, HEG remains to be our top pick where again the news flow also remains to be more positive for HEG because if you look at the most of these global players in graphite electrodes, it seems to be consolidating.Also, the penetration seems to be moving towards the steel making process which is something big for HEG. We believe HEG is one where the stock seems to be finding support at 200-week moving average supported by falling channel breakout. We expect HEG to head towards 575, 580 keeping a stop loss of 467, inside the metal space we remain to be positive for.Apart from HEG, ELGI Equipment in capital good space is a company with good sets of numbers and the stock has already seen a good correction of almost 40% from the top, forming a strong base above 200-week EMA and with a falling channel breakout, we expect this stock to head towards Rs 575, 580. ELGI Equipment and HEG remain our top picks.
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