Nifty set to hit 18500, Bank Nifty 40500 in coming months; Maruti, ONGC, ITC, TCS, Sun Pharma among top stocks

Nifty set to hit 18500, Bank Nifty 40500 in coming months; Maruti, ONGC, ITC, TCS, Sun Pharma among top stocks

By Rajesh Palviya

Nifty gapped up on the day of budget and witnessed extreme volatility throughout the day.  We saw an intraday drop of 200 points but recovered sharply during the second half of the session. Nifty has bounced multiple times from 16800 levels indicating buying at lower levels. Since the past 5-6 months, index is consolidating within a broad range from 18400-16800 levels representing medium term sideways trend. This consolidation zone is also supported with its 200-day SMA (16668) which remains a crucial support zone. RSI has bounced from 50 levels indicating that the momentum has reset and is now set for a new uptrend. It looks like a near term bottom of 16800 is formed and going forward we can see the index heading towards 18500 levels in the coming months.

Bank Nifty gapped up on the day of budget and witnessed extreme volatility throughout the day. We saw an intraday drop of 800 points but recovered sharply during the second half of the session. Bank Nifty has formed a “rounding pattern” indicating a move above 38900 can open the door to a new leg higher. Any sustainable rally above 38900-39000 levels may cause upside momentum towards 39700-40000 levels. Index is well placed above its 20, 50, 100 and 200 Day SMA which reconfirms bullish sentiments. RSI has recovered from 50 levels indicating that the momentum has reset and is now set for a new uptrend.

It looks like a near term bottom of 36200 is formed and going forward we can see the index heading towards 39500 – 40000- 40500 levels in the coming months.

Nifty Auto

Nifty Auto has seen a bounce from the 11200 levels and from a key support level indicating buying at lower levels. It is heading towards its major resistance of 12000 above which it can extend to 12300 levels as well. It is making a series of higher highs and higher lows indicating sustained uptrend. We are expecting upside targets of 12500 with a stoploss of 11000. Attractive looking stocks from the sector are Maruti Suzuki, Tata Motors, TVS Motors, and Hero MotoCorp.

Nifty Energy

Nifty Energy has seen a bounce from the 24000 levels and from a key support level indicating buying at lower levels. It is heading towards its major resistance of 25400 above which it can extend to 26000 levels as well. It is making a series of higher highs and higher lows indicating sustained uptrend. We are expecting upside targets of 26000 with a stoploss of 24000. Attractive looking stocks from the sector are GAIL (India), ONGC, Tata Power and NTPC.

Nifty FMCG

Nifty FMCG has seen a bounce from the 35100 levels and from a key support level indicating buying at lower levels. It is heading towards its major resistance of 38000 above which it can extend to 39000 levels as well. It has also formed a double bottom indicating buying at lower levels. We are expecting upside targets of 39000 with a stoploss of 35000. Attractive looking stocks from the sector are Britannia Industries, ITC, McDowell Holdings, UBL and Varun Beverages.

Nifty IT

Nifty IT has seen a bounce from the 34200 levels and from a key support level indicating buying at lower levels. It is heading towards its major resistance of 36600 above which it can extend to 37200 levels as well. It has made a “bear trap” formation indicating that the bulls have entered with great force indicating buying at lower levels. We are expecting upside targets of 37200 with a stoploss of 37500. Attractive looking stocks from the sector are Infosys, Tata Consultancy Services (TCS), HCL Technologies and Coforge.

Nifty Metal

Nifty Metal has seen a bounce from the 5200 levels and from a key support level indicating buying at lower levels. It is heading towards its major resistance of 5900 above which it can extend to 6200 levels as well. We are expecting upside targets of 6200 with a stoploss of 5300. Attractive looking stocks from the sector are Hindalco Industries, Jindal Steel Power, National Aluminium, and Welspun Corp.

Nifty Pharma

Nifty Pharma has seen a bounce from the 12800 levels and from a key support level indicating buying at lower levels. It is heading towards its major resistance of 14200 above which it can extend to 14800 levels as well. It has bounced from the lower end of a declining channel indicating there is more steam on the upside left. We are expecting upside targets of 14800 with a stoploss of 12800. Attractive looking stocks from the sector are Biocon, Cipla, Lauras Labs, and Sun Pharma.

(Rajesh Palviya, VP – Research (Head Technical & Derivatives), Axis Securities. Views expressed are the author’s own.)