IT seems to be leading the gain today and it has been leading the gain for the last one week, even if we see. Do we expect more upside when it comes to the IT index?
Vinay Rajani: Yes, so Nifty IT index, the primary trend of the index is quite good and it has witnessed some correction from the all-time high, which was around 43,300 and from that level, it came down to 41,800.
And in today’s trade, it has shown some good reversal. And this is a continuation pattern. We can say it is a flag pattern breakout on the daily chart.
And it has been finding support on its 20 days exponential moving average. So, there was a breakout on the long-term charts in the month of June and after that, we witnessed some followup buying. After that, we also witnessed some correction.
And this after zigzag movement again continuation of an uptrend is there. So, I feel that IT index is headed higher and the primary trend is quite bullish and every dip should be bought into.
And right now, in today’s trade also, I feel that going by the charts in the largecap as well as in the midcap segment in IT stocks, I feel that in the short term also we can get good momentum in the IT sector.
Yes, the bullish view should be there and yesterday’s low of 41,800 in the Nifty IT index is a strong support and I feel that that will not break and this is a short-term bottom for the index. Yes, the largecap stocks which can be looked at are Oracle Finance, then LTIMindtree. These are the stocks from the largecap. And Firstsource Solution, FSL from the midcap segment can be looked at for long-side trading.
And what is your view when it comes to the Nifty Bank index? Well, I guess the bank index is finding it difficult to cross the 50 DMA level. A few days back, we also saw it testing the 100 DMA.
Vinay Rajani: Bank Nifty yesterday surprise move was there. If we go by the last week’s data, we witnessed a short buildup in the indices. On Friday also, we witnessed a short buildup in the index. But yesterday was the altogether different move.
Yesterday, we witnessed a short covering in the Bank Nifty and after that followup buying is also coming in today’s session. Right now, though it is trading flat, there is no significant momentum and followup is there.
But the way it has reversed from yesterday’s low, it is quite convincing. And especially, these private sector banks are looking very good. And they have shown some reversal signs on the short-term charts.
So, I think the momentum should be there on the higher side. However, 51,700, which happens to be the previous swing high, this is the high which was registered on 3rd September.
To be precise, that level is placed at 51,750 the spot. So, Bank Nifty has got that strong resistance. So, up to that level, movement could be there, catch-up rally could be there.
But once we see 51,750 is getting taken out on the upside, then we can see a large move on the upside and that can trigger an all-time high also.
So, I am keenly watching this level 51,750 in the short-term resistance. Once that is taken out, then we can expect all-time highs also in the coming weeks.
But what about FMCG index? Over the last three to four months, that one is actually behaving itself, no zigzag moves. We are seeing one-way momentum coming in for FMCG index, where they are outperforming actually the other indices. What is your take coming in on FMCG index from here on? Do you think the outperformance will continue or it will take it a bit easy now?
Vinay Rajani: So, right now, what is happening is the nice sector rotation is going on and everybody is in doubt about the market trend. Because in last week, we witnessed some profit booking coming in.
Unless and until we come out with those uncertainties, the defensive sector like FMCG will keep on going well.
So, as of now, it is trading at its all-time high. It is clearly into an uptrend. So, there is no doubt about it. We should not anticipate the top or we should not take any contrarian call as of now.
So, it is looking good. And for the index, 64,000 is a very strong support, I am talking about the Nifty FMCG index. And many largecap stocks from this particular sector is looking very strong like Dabur, Britannia, HUL.
In fact, HUL broke out from the long-term charts couple of weeks back only and continuation of that trend is still there.
So, I feel that positional trend will remain bullish and no doubt profit booking or correction could be there but the primary trend is quite good, so one should utilise the short-term dips as a buying opportunity and I am looking a bullish view for next couple of months we can say. So, FMCG is looking still stronger.
What are your top picks in this market scenario then, should I guess that they are from the FMCG or the IT pack or you are moving away from those and giving some different ideas to all of our viewers?
Vinay Rajani: So, as I said I am bullish on FMCG so one can go long on one FMCG stock which is Dabur.
Yesterday Dabur has given a fresh breakout on the chart. It is trading at its all-time high and the momentum is quite there.
So, considering the overall trend the kind of moving averages and indicators that we have been tracking it is looking quite strong and can participate in this rally.
Dabur one can go long at 665, for the traders I would suggest a stop loss of 650. If you are a two-three days trader, then 650 should be the stop loss and on the upside 695 would be the target.
Dabur is one stock which I like from the largecap FMCG space. But Radico Khaitan which is a liquor company can be a part of, we can consider it as a FMCG stock only.
Radico Khaitan and other liquor companies are looking very strong on the charts. So, Radico Khaitan at 2035-2040 one can go long, 1980 should be the trader’s stop loss and on the upside I am expecting 3% to 5% up move which is around 2140 should be the target for Radico Khaitan. So, Radico Khaitan and Dabur India I like from the FMCG space.
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