Nifty rallied for the consecutive session on Friday. However, it failed to surpass the previous record high of 14,257. The Nifty’s price action took the form of an indecisive candle. After gaining 9.5% in the previous week, Nifty rose 1.7% this week. Nifty breadth turned negative in Friday’s trade as 36 out of the Nifty50 constituents ended in the red, suggesting profit taking in selected stocks. Going ahead, Nifty’s ongoing consolidation above 15,000 is likely to continue.
Bank Nifty outperformed in today’s trade. However, throughout the week, the Bank Nifty failed to surpass the previous week’s high. A decisive breakthrough above 36,600 is essential to regain momentum on the upside, while on the flipside, 35,000 could turn out as immediate floor.
Midcap100 and Smallcap 100 indices are relatively holding ground. Positive follow-up action could attract further outperformance from these spaces. Meanwhile, the metal index failed to sustain above the prior month’s peak. However, considering the overall structure, pullback in the metal space could provide buying opportunities in select metal stocks.
Buy Ambuja Cement near Rs 275
Stop loss: Rs 265
Target: Rs 295
With sustained moves above important averages, the recent congestion phase seems to be in a mature stage. Positive follow-up action could resume prevailing uptrend.
Sell M&M Feb future near Rs 915
Stop loss: Rs 955
Target: Rs 830
Post multi-month up move, mild profit taking is visible from the weekly high. Levels of Rs 950 could act as an immediate hurdle, while inability to sustain at current levels could attract some price correction till Rs 850-830 zone.
Amit Trivedi is CMT, Technical Analyst – Institutional Equities, YES Securities. Views are his own.