Nifty managed to linger around that 13,000 level. The broader markets also made a better recovery. Do you now sense that it is the return of the midcaps perhaps and we will now see the broader market play catch up while the index gets into some time bound consolidation?
Yes, I believe that the midcaps would probably try and play catch up now. Two very decisive trends are emerging for the indices. One on the roll over front because the November series was one of the best series the market has seen. So, it is very important to study the behaviour of the rollovers for the next series, i.e., the December series.
Apparently there are two distinct characteristics which emerge from the rollovers. One is that the Nifty rollovers are on the higher side, which means there is a fair assumption that could be derived that the long rollovers or the positions which were on the long side have been rolled over to the next month for the index futures. But for the Bank Nifty, the rollovers have dropped as compared to the previous month’s rollovers and a like to like comparison indicates that there is a possibility that the Bank Nifty or the banking index may go through some sort of a cool off.
Now if you look at the last two-three days of price trends on the indices, the Nifty has managed to just be around the 13,000-mark. The Bank Nifty is unable to break past about the 30,000-level as well. Now many of these banking names are getting into overbought territories. In that likelihood, adding to the rollover positions derivatives data as well as the price behaviour, I do believe that the midcaps and the smallcaps in the market could probably get much more.
I would say put your buying attention there over the next few days and weeks till the time the indices go through a consolidation. I believe that there is a higher chance that the Nifty would remain more or less in the range 13,200 to 12,800; these are the two resistances and support simultaneously for the Nifty. I think closer to 30,500 as the resistance for Bank Nifty and closer to 28,500 as the support for Bank Nifty. I think that could be the range for both the indices for the next one or two weeks.
Any trading ideas for Tuesday?
I want to recommend two stocks. One of them is Manappuram Finance. I think it is a very interesting chart in the making. The stock is clearly showing signs of some renewed momentum and I think in the last week, you have seen gains of more than 6.5% or 7% for Manappuram Finance. That is on the back of some very increasing and decent volume for the stocks. So I would say that is a buy. Targets could be kept at Rs 185-186 mark and stop loss could be kept at Rs 176.
The second would be a buy on JB Chemicals. It is a very interesting chart. The stock in the last six months has gone through a very strong upside. It is now just about trading very close to its 50-day moving average, which I think is around Rs 995-1,000 odd zone. So I believe JB Chemicals could be an interesting bet from a one to two week’s perspective with targets of Rs 1,050 and stop loss at Rs 975.
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