Data hints at bullish setup, Nifty headed for 23,560 & 23,890: Experts

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Most technical charts and options data hint at a bullish setup. According to technical analysts, Nifty is expected to continue
its upward trajectory towards 23,560, followed by 23,890, with immediate support at 23,000. Analysts suggest Tata Motors,
UltraTech Cement, Sun Pharma, McDowell, UBL, ITC, Marico, HUL, Tata Consumer, and Lupin for short-term trading.

Where is the Nifty headed this week?
Markets witnessed very strong whipsaws last week, with a massive correction that gave participants an unprecedented dip. However, ending the week with higher highs has restored hope among the Bulls. Options chain reflects strong immediate support at the 23,000 zone, indicating very aggressive Put writing.

Meanwhile, 24,000 Call writers are holding maximum positions. This suggests a broad trading range for the week, hinting at a bullish setup. FIIs’ longs continue to remain on the lower end, but a modest daily improvement is also encouraging for the Bulls, suggesting a short-covering rally is very likely. What should investors do?
Investors should wait to see how the market reacts to the formation of the government. If the 23,000-22,850 zone hold, then a move towards 23,600 and above could occur. The pharma and FMCG sectors have shown a breakout, with stocks like breweries particularly showing good momentum. Focusing on McDowell, UBL, ITC, Marico, and Godrej Consumer from the FMCG pack, and Granules, Metropolis, and Lupin from pharma can be observed on the long side, with a tight stop-loss at Friday’s closing levels on an immediate basis.JATIN GEDIA TECHNICAL RESEARCH ANALYST, SHAREKHANWhere is the Nifty headed this week?
As far as derivatives data is concerned, 23,000 PE followed by 23,200 PE saw a sizeable addition in open interest, implying strong support. So minor degree pullbacks towards support zone 23,160 – 23,140 should be used as a buying opportunity. The current rally is likely to extend towards 23,82. Taking into consideration the technical setup, derivative data points and the FII positioning, we expect a rally of ~2.2% – 3% this week.

What should investors do?
The Nifty FMCG index held on to its 200-day moving average. The Pharma Index has broken out after three months of consolidation. Also, the underperforming IT sector has witnessed a trend reversal. Buy Sun Pharma at `1,507 with a stop loss at `1,460 for the target of `1,564 -1,583. Buy UltraTech Cement at `10,460, stop loss of `10,100, target of `11,000 – 11,300. Buy Tata Motors at `970 with a stop loss of `940 for a target of `1,010 -1,035.


Where is the Nifty headed this week?
A longer wick on the weekly candlestick price formation is a good sign for demand-led, support-based buying. The elimination of the event uncertainty was indicated by the sharp decline in volatility. Options data shows a significant upward shift in trading range with immediate support around 23,000 and confidence writing at 22,500 and 24,000 strikes. The trend support appears to be solid around 22,210, and the immediate momentum-based support is located at 22,860. Only a breach below this level will result ina significant distortion of the current bullish trend. Nifty is expected to keep up its upward trajectory towards 23,560, followed by 23,890.

What should investors do?
Most of the quality largecap stocks within IT and FMCG are showing signs of renewed strength, which could be accumulated even on declines, such as HUL, Tata Consumer Products, Page Industries, Bata India along with Infosys, LTI Mindtree, Coforge being our top picks. We also like selective auto and power stocks, which have been locked in a secular bull trend and offer a good opportunity as folio adds even at this juncture, viz. Tata Motors, TVS Motors and Exide Industries.