Technical Market Outlook By Dharmesh Shah, ICICIdirect
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Below is the Technical Market Outlook By Dharmesh Shah, Head – Technical, ICICIdirect
* Nifty Small cap index relatively outperformed in a volatile week with 2% cut, even as Nifty slipped 4% for the week
* We expect ongoing corrective phase to get arrested around 16900 in coming week. Therefore one should not construe current decline as a negative, rather accumulate quality large and midcap companies as structural uptrend remains intact. On the upside, key hurdle for the week is placed at 50-day EMA at 17600 levels
* Over past 20 months all three intermediate corrections have measured average 9% and retraced preceding rising segments by 38%. With 8% correction from 18600 behind us, we expect markets to maintain the rhythm as structural uptrend remains intact.
* Broader market indices are expected to extend their base formation in the vicinity of 50-day EMA amid stock specific outperformance
* Sectorally, BFSI and IT provide favourable risk-reward setup with oversold readings while capital goods and Telecom remain resilient
* In large cap space we like Reliance, Kotak Bank, SBI, TCS, Divis’s Laboratories while in Mid cap space we like Fortis Hospitals, Indoco Remedies, Brigade Enterprises, Minda Corporation, Triveni Engineering, BEML, Thermax.
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