Highlights
- Nifty remains technically strong, targeting 24,500 next week with robust support at 23,800 amid easing crude prices.
- Bank Nifty targets 59,300 with support at 57,500; investors should continue adopting a buy-on-dips approach.
- Shah prefers Mahindra & Mahindra and Larsen & Toubro, citing favourable technical setups and improving macro conditions.
Indian equity markets ended the week on a strong footing, with the Nifty holding above the crucial 24,200 mark and Bank Nifty extending its outperformance. In an exclusive conversation with ET Now, technical analyst Dharmesh Shah shares his outlook on key market levels, sectoral opportunities and explains why declining crude oil prices and intermittent volatility continue to support a buy-on-dips strategy.
Nifty 50 outlook and key levels
Shah stated that the Nifty 50 held firm above 24,200, which acted as resistance at the 100-day exponential moving average. The outlook remains positive, with a target of 24,500 for the coming week and strong support at 23,800.
“I think the week has ended on a very strong note. More importantly, we managed to close above the 24,000 level. Over the last few trading sessions, the Nifty has been facing resistance near its 100-day Exponential Moving Average (EMA), which is placed around 24,200. Going forward, if you look at the Nifty 50 constituents, whether it’s banking, capital goods, or auto stocks, most of them indicate an upside potential of 5-10 per cent from the current market price,” he said, adding, “overall, the technical structure of the Nifty appears positive. More importantly, crude oil prices remain a key trigger. If crude declines towards the $68-69 range, along with stability in the rupee and softer commodity prices, it will bode well for the Indian markets.”
“From both the current and medium-term perspectives, the outlook remains positive. We expect the Nifty to move towards 24,500 in the coming week, with strong support placed around 23,800,” Shah said.
Shah expects Bank Nifty to head toward a target of 59,300, with support placed at 57,500.
“Bank Nifty, which accounts for nearly 35 per cent of the Nifty’s weight, has been performing exceptionally well. It managed to close above the 58,000 level, and we expect it to move towards 59,300, with strong support placed around 57,500. From a medium-term perspective, there will be phases of volatility, but investors should not be overly concerned. Instead, a buy-on-dips strategy remains the preferred approach, with 23,800 expected to act as a strong support level going forward,” he said.
General strategy and key market drivers
Shah said that despite market volatility, investors are advised to treat dips as buying opportunities. He added that falling crude oil prices and a stable rupee are major positive triggers for the Indian market.
“From a technical perspective as well, L&T has formed a strong base on the daily charts in the Rs 4,150-4,250 range. In today’s trading session, the stock managed to close above Rs 4,250. Sustaining above this level could take the stock towards Rs 4,500, with a stop-loss at Rs 4,050. Therefore, L&T and Mahindra & Mahindra (M&M) are our top large-cap picks at the current market levels,” he added.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
