Stock specific action with banking and IT leading the index higher : Epic Research

Mr. Mustafa Nadeem, CEO, Epic Research for your consideration:

Nifty ends a week on a slightly cautious note as it made a spinning top pattern though it is holding almost 7 odd months highest level. It was a week which had its first credit policy after demonetization where RBI kept its stance unchanged and bulls managed to protect lower levels. Nifty broadly consolidated between 8840 on the higher side which is also a 88.6 retracement of 9119 to 6823.

Last week it was majorly a stiff consolidation period with broader range being 8840 which is 88.6 while on downside it was supported by 76.2% at 8720 which is of previous fall from 8968 - 7893. Going forward we may see momentum to be bullish unless this particular range is breached.

Moving averages have contracted now as we are higher above major averages and mean reversion can be one of the threat with downside risk higher though it is evident the rally is strong as bulls have protected every dip in this rally of almost a 1000 points.

As Per OI data writing is seen at 8700 - 9000 strikes and this shall be the range for coming week. we may see stock specific action with banking and IT pack leading the index higher. Infy is looking very nice on charts despite all the negative news flow which may have been affecting already. Bank of Baroda, PNB, BOI and Union bank are some PSU banks one can look at.

Source : Equity Bulls

Keywords