Chartist Talks: Sudeep Shah of SBI Securities suggests two short-term stocks; April charts indicate a robust market.
Sudeep Shah is pessimistic about the Nifty IT index,although he suggested purchasing Axis Bank and PCBL in the near term.
Sudeep Shah of SBI Securities thinks the April series would be quite good for the market given the recent strong recovery and the present chart pattern.
Additionally,market mood is calm and the VIX is trading below both its short-term and long-term moving averages, indicating a return to D-Street’s risk-on mode. According to him in an interview with Moneycontrol,a positive outlook is usually supported by a stable VIX,which opens the door for more upward momentum in stocks.
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Sudeep Shah is pessimistic about the Nifty IT index,although he suggested purchasing Axis Bank and PCBL in the near term. “The Nifty IT is in a downward trend after dropping below its 20-month EMA line on a monthly basis. Most significantly,both lines are in a falling mode,and the 14-period monthly RSI is quoted below its 9-month average,” he reasoned.
Can the rally continue? If so,will the April series or next week see the Nifty 50 surpass the February swing high?
Similar to a Twenty20 match when momentum may change in a few overs, the stock market made a spectacular recovery this past week, ending March 21. Following some consolidation, Nifty erupted on Tuesday and produced a strong rebound, ending the week at 23,350 with an incredible 4.26% gain. Its best weekly performance since February 2021 demonstrated how quickly market sentiment can shift, just like in cricket!
This change is further supported by the volatility decline, with the India VIX falling more than 5% during the course of the week. Market sentiment seems calm as the VIX trades below both its short-term and long-term moving averages, indicating that D-Street is once again in risk-on mode.
A optimistic perspective is usually supported by a stable VIX, which opens the door for more upward momentum in stocks.
In just 13 trading sessions, the Nifty has risen roughly 1,400 points (6.31%) from its most recent low of 21,964, which was much in line with our predictions. The index is currently testing its 100 and 200-day EMAs after crossing its 20 and 50-day EMAs. Strong momentum is shown by the daily RSI (Relative Strength Index), which is still rising and in bullish territory.
As a result, we think the index will probably keep moving north in the near future. The market might, however, take a brief break during the next two to three trading sessions, much like teams pacing themselves throughout a lengthy tournament. However,stock-specific action is anticipated to continue to be robust, just as every IPL match has its star performances!
When discussing critical levels,the range of 23,130–23,100 is probably going to act as a buffer in the event of an abrupt drop. In the short term,it is anticipated to test the 23,600 level and then 23,800.
Does the current recovery indicate that the market will have a very good April series? Will the Bank Nifty reach its December 2024 swing high in April as well?
Yes, the market will benefit greatly from the April series given the current chart configuration.
With a weekly gain of more than 5% last week—its largest since December 2023—Bank Nifty has significantly outpaced the headline indices. It has created a sizable bullish candle on a weekly basis, confirming the strength of the current rebound. Both the short-term and long-term moving averages have been substantially surpassed by the index. Interestingly, the 100- and 200-day EMAs’ dropping slopes have slowed considerably, which is a bullish indication, while the 20- and 50-day EMAs are gaining upward momentum.
This optimistic outlook is also supported by momentum indicators. The daily MACD (Moving Average Convergence Divergence) histogram indicates an acceleration in buying momentum, and the daily RSI is still in a solid position, continuing its upward trajectory. Both indicators signal to additional strength in the upcoming sessions.
When it comes to key levels for the Bank Nifty, the 50,100–50,000 range will serve as an important support zone for the index. The way is still open for a short-term upward advance toward 51,100 and then 51,700 as long as it stays above the crucial 50,000 line.