market strategy: watch out for 17,800-17,900; avoid new longs next week and stay stock specific: Mehul Kothari


“For the week ahead – 17,800-17,900 would be an important area to watch. This is mainly because we have a downtrend line near 17,800,” explains Mehul Kothari – AVP – Technical Research, Anand Rathi Shares & Stock Brokers.

In an interview with ETMarkets, Kothari said, “On the downside, immediate support is at 17,550. So the prudent strategy may be to avoid further long positions in the index and stay stock-specific” Excerpts edited:

What a week for Indian markets. Both Sensex and Nifty50 were up 1% and recovered crucial resistance levels. What led to the price action?

Domestic markets have maintained a northerly rally over the past week and closed in the green for the fourth week in a row.

The Nifty spot recovered the 17,700 mark after April 2022. Sentiment remained bullish mainly on the back of positive global signals.

The rally in US markets and FIIs turning buyers in the spot segment forced the bulls to dominate once again.

What should be the trading strategy for the coming week as Nifty50 trades around the 17,700-17,800 levels?

For the week ahead – 17,800-17,900 would be an important area to watch. This is mainly because we have a downtrend line near 17,800.

Additionally, 17,800 – 17,900 is the potential reversal zone for the bearish harmonic shark pattern in Nifty. So, if the bulls fail to break through the indicated area, there is a possibility of profit booking in the coming week and that would be healthy for the markets.

On the downside, immediate support lies at 17,550 points. A daily close below the same value could lead to profit bookings and this could drag the index towards 17200.

Thus, the prudent strategy may be to avoid new long positions on the index and to remain security-specific.

India celebrates its 75th Independence Day on Monday. If someone is considering going into trading, can they become financially independent? What are the key things to keep in mind before becoming a full-time trader?

Trading for a living is like looking for easy money, but in the hardest way. If someone is considering getting into trading, there could be a lot more to prepare for.

A few important aspects of the same are always followed – a stop loss and protect your trading capital. Risk management is the most important aspect of becoming a successful trader.

IGL, , and have risen more than 20% over the past week. What should investors do? What does the graph suggest?

All three stocks have performed fantastically over the past week. The price action has helped stocks reach a certain point where it looks like investors should now continue to hold the stock since the momentum began.

However, short-term traders should book their profit once since all three names are in an overbought zone on the intraday charts. For traders, we suggest booking profits and re-entering a significant correction where the risk-reward ratio would be favourable.

On a sector basis, metals rose more than 4% while consumer staples fell more than 1% in a buoyant market. What led to the price action?

The rally in the metals was long overdue and that’s why it attracted new buyers. The split of shares of

gave investors a sentimental boost.

FMCG, on the other hand, remained slow, like the other defensives. So far, the relay is in the hands of the high beta sector.

The market recouped its losses and turned positive on a YTD basis. Do you think Nifty could pick up 18,000 in the August series?

It was a fabulous recovery and the magnitude of it was very surprising, but the markets are supreme. As mentioned above, 17,800 – 17,900 could possibly be a temporary reversal point for the index.

If that gets pulled in the coming week, then yes, we could see 18,200 in this series as well. However, a small correction would be healthy to balance the ongoing bullish pattern.

Freedom choices for investors for Independence Day week?

Here are some freedom picks for the next 3-4 weeks:

ITC: Buy between 308 and 300 | Stop Loss Rs 285 | Target Rs 345

The year 2022 has taught us that

has been free from market uncertainties and therefore we believe it can also be bought at this level. Recently, we have seen another multi-year breakout in the stock, and then after its consolidation.

The price action indicates that the meter is ready for Rs 350 until such time as it holds above Rs 275. Thus, we advise investors to accumulate the stock in the range of Rs 308-300 with a stop loss of Rs 285 for the upside target. from Rs 345 in 1 to 3 months.

Ltd: Buy in the range of 96 to 92 | Stop Loss Rs 85 | Target Rs 112

On the daily chart, LT Foods is about to make a breakout that looks like a Cup and Handle bullish pattern. The pattern will be confirmed once we close above Rs 95.

The price action is supported by decent volumes. Thus, investors are advised to build the stock in the range of Rs 96-92 with a stop loss of Rs 85 on a closing basis for the potential upside target of 112 levels in the coming 1-3 months. .

Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times.

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