Tech indicators hint weakness is not yet over: Analysts

Most technical data points, such as FPIs’ long-short ratio, current price setup, and India VIX, among others, indicate the correction is not yet over. However, a move above 18,500 by Nifty would reverse the bearishness, according to technical analysts. Hindalco, Canara Bank, Bank of Baroda, Indoco Remedies, and Bayer Cropscience are some of the stocks that look better on charts, said analysts.

ASHISH CHATURMOHTA
HEAD OF RESEARCH, JM FINANCIAL SERVICES

Where is Nifty headed this week?
On the downside, Nifty has immediate support at 17,950; breaking below will see a test of the recent low of 17,774 which will act as support. India’s VIX has come down to 14.87. VIX below 15 levels will support the market, and any rise will keep the markets under pressure.

What should investors do?
Hindalco saw a nice recovery last week in the metal sector and higher rollovers to January series, while JSW Steel looks poised for a breakout on the upside. PSU Banks have seen a good bounce back; among them, Canara Bank hit a 5-year high and is in strong momentum. SBI continues to exhibit strength and has seen good rollovers. Titan has seen buying at lower levels after correction and looks attractive at these levels

ABHILASH PAGARIA
HEAD- NUVAMA ALTERNATIVE & QUANTITATIVE RESEARCH

Where is Nifty headed this week?
In the January 2023 series, the bulls and the bears will have moments of victory as we expect volatility ahead of December 2022 quarter earnings season and Union Budget on February 1. We believe any weakness in Nifty till 17,800 should be used as an opportunity to take a long bet with a stop loss at 17,670, while 18,550 could be a near-term cap, and one can look to initiate shorts with 18,670 as a stop loss.

What should investors do?
As per our quant model reading and rollover analysis for the next few weeks, we believe metals and public sector banks should continue to do well while our short bias is towards the auto sector. Within stock, we continue to push Bank of Baroda as a long bet as it’s our high conviction MSCI Standard Index inclusion candidate for Feb 2023 review.

MEHUL KOTHARI
AVP - TECHNICAL RESEARCH, ANAND RATHI SHARES

Where is Nifty headed this week?
Nifty witnessed a corrective move of more than 1,000 points from the peak. This indicates that the correction is not yet over. FPIs’ long-short ratio logic played well, and this ratio has much room on the downside. We expect a further market fall once the index starts trading below 18,080. Only a move above 18,500 would negate the bearish stance and might see new highs very soon.

What should investors do?
Remain stock specific and avoid aggressive bets. We are bullish on Indoco Remedies. The stock has confirmed a significant range breakout above Rs 410 and is heading toward Rs 460. Buy with a stop loss near Rs 380. One can even buy Bayer Cropscience near Rs 4,900 with a stop loss of Rs 4,750 for an upside target of Rs 5,200.