Sudeep Shah, the Deputy Vice President and Head of Technical and Derivative Research at SBI Securities, forecasts a significant directional move in the Nifty index. He advised investors to consider InterGlobe Aviation and Garware Hi-Tech Films for the coming week. The Nifty index is currently in a consolidation phase with support in the range of 22,600-22,550.
Shah warns that if Nifty slips below these levels, it could see a further correction down to 22,250. Conversely, resistance is anticipated in the 23,050-23,100 range. A move above 23,100 could lead to a pullback rally up to 23,400, potentially extending to 23,700 in the short term.
On the weekly charts, Nifty has formed an NR7 pattern, which typically precedes a surge in volatility. This suggests that a breakout or breakdown may happen in the coming sessions.
Nifty consolidation phase and breakout potential
The Bank Nifty index has maintained a higher high-higher low formation and remains in a consolidation phase between 49,628 and 48,525 over the past six trading sessions. Shah indicates that a decisive breakout on either side of this range could result in a trending move. Shah recommends two stocks for investors:
1.
InterGlobe Aviation:
– Currently trading above short and long-term moving averages
– Daily RSI is in a bullish zone
– Recommended buy range: Rs 4,520-4,490
– Stop-loss: Rs 4,360
– Target: Rs 4,730, followed by Rs 4,850
2. Garware Hi-Tech Films:
– Daily RSI is nearing the 60 mark
– Recommended buy range: Rs 4,210-4,180
– Stop-loss: Rs 4,010
– Target: Rs 4,470, followed by Rs 4,500
Shah also highlighted that broader market indices like the Nifty Midcap and Nifty Small Cap 100 have outperformed the frontline indices despite recent consolidations. However, both indices saw corrections last Friday.
Other stocks to watch include JSW Energy, which has been on a pullback rally and recently surpassed its 20-day EMA, and NALCO, which formed a “Three White Soldiers” pattern, indicating strong bullish momentum. Investors are advised to consider these insights and stock recommendations when planning their trading strategies for the coming week. However, they should consult with certified experts before making any investment decisions.
