A break below 17,300 can take Nifty to 16,900: Analysts

SRIRAM VELAYUDHAN
VP – ALTERNATIVE RESEARCH, IIFL INSTITUTIONAL EQUITIES

Where is Nifty headed this week?

The rally in equities over the last two months was linear, with instances of profit booking being shorter. For Nifty, 17,800 has continued to act as a critical resistance where the confluence of the trendline (highs of Oct-21, Jan-22, and Apr-22) and the 75% Fibonacci retracement of the corrective leg between 19 October 21 and 17 June 22 is placed. If one observes, instances of rejection in the last two weeks have also emerged from the same level. While on the upside, 17,700 and 17,800 are key resistances for the index, supports are placed at 17,350 and 17,100.

What should investors do?

Traders can use the dip to create long positions in Nifty futures around 17,100 levels for targets of 17,600-17,750. One can use 16,900 as a stop loss for this long trade. On the sectoral front, we expect auto, banking, financials, power, and capital goods to outperform, while IT, FMCG, and metals can be the laggards. Investors with a medium-term perspective can use instances of correction to accumulate

, ICICI Bank, M&M Financial Services, , Maruti, and Apollo Hospitals, where the trend appears to be on the upside.

ARPAN SHAH
ANALYST,

Where is the Nifty headed this week?

Nifty is likely open gap-down following weak global cues and volatility during a truncated week. If Nifty can break from the 17,300-17,800 range, we can witness strong directional momentum. will be the key factor in deciding the direction of the market post its AGM. Bank Nifty has strong resistance at the 39,500 levels, and traders are advised to take long positions only above this resistance level. On the downside, it has strong support near the 38,000 levels.

What should investors do?

Although Nifty closed with a 1% cut during the week, the Smallcap 100 index outperformed and closed with a 1.5% gain, indicating mid- and small-caps likely outperforming the benchmark index this week. Nifty Realty index has given a strong reversal signal in July and consolidated in the August series. We expect the Realty index to strongly outperform the benchmark in the coming 2-3 months. Investors and short-term swing traders can look to add stocks like DLF and

on dips. is a buying opportunity on dips to Rs 110 for the target of Rs 118-120. From the small-cap segment, we recommend investing in for an upside target of Rs 1,280.

AJIT MISHRA
VP – TECHNICAL,

BROKING

Where is Nifty headed this week ?
Nifty has been hovering in the range of 17,300-17,800 after the phenomenal surge, and either side break would trigger the next directional move. The mid-cap pack has the upper hand, while the small-cap index is still struggling below the longterm average (200 EMA). A decisive breach of 17,300 would push the bulls on the back foot, and Nifty may retrace towards the 16,900 zones; else, the prevailing consolidation would continue. On the higher side, 18,000 would act as a hurdle.

What should investors do?

Investors shouldn’t worry much about intermediate price fluctuations during the corrective phase and focus more on accumulating quality stocks on dips. We reiterate our preference for the top-performing sectors like banking, financials, auto, and FMCG and recommend nibbling selective into IT, pharma, and realty pack with a medium- to long-term view. From these sectors, we like ICICI Bank (target Rs 950),

(Rs 630), Eicher Motors (Rs 3,700), Maruti (Rs 9,300), and Marico (Rs 550), to name a few.