Consolidation likely to continue, prefer buy on dips: Experts

Market ended higher for the fourth consecutive week which ended on November 27 with benchmark indices hitting fresh record highs supported by the FIIs. Here are a few expert views on what to expect in the market this week:

Ajit Mishra, VP - Research, Religare Broking | Participants will react to a list of important data and events. To start with, we will see their reaction to GDP numbers, which were announced on November 27 after the market close. On the data front, the auto sales numbers will start pouring in from the beginning of the month. Besides, the Markit Manufacturing PMI and Services PMI data are scheduled for December 1 and December 3, respectively. Lastly, the RBI’s MPC will announce its stance on key rates on December 4. Indications are in the favour of further consolidation in the Nifty index and the probable range could be 12,600-13,100. Meanwhile, we expect volatility to remain high due to scheduled data and events. The prudent approach is to accumulate quality stocks on dips. Almost all the sectors are participating in the rally but we’re seeing mixed trends within the sector so traders should focus more on the selection of stocks. We feel the recent traction in the broader market will continue but only fundamentally sound midcap and smallcap counters should be preferred.

Shabbir Kayyumi, Head of Technical Research at Narnolia Financial Advisors | The continuation of consolidation on the higher side cannot be ruled out, which can be understood by taking clues from RSI, the momentum oscillator. RSI on the daily timeframe is trading above 50 mark, weekly RSI is at 75 and higher time frame monthly RSI is placed around 68 levels indicating the market is in a strong rally and unless RSI falls below 40 mark on the daily time frame, one should opt for buy on dip strategy. At the same time, the immediate support trend line connecting 10,790 and 11,536 levels is rising and currently, it is placed around 12,400 mark. Unless this trend line support is not taken out, the current bullish movement will continue. According to EW count index is progressing in an irregular flat wave IV and once this correction concludes, chances of the new impulse towards 13,400 are quite high.

Ashis Biswas, Head of Technical Research, CapitalVia Global Research Limited- Investment Advisor | A lackluster trend to continue in the market and an attempt to overcome the resistance level around the Nifty 50 Index level of 13,040. While a breakout above 13040 is the key factor from a short-term perspective. Anything above this level market to gain momentum, that could lead to an upside projection till 13,130-13,140 level. The momentum indicators like RSI, MACD to further strengthen in favor of positive outlook and advise the traders to consider a breakout above 13040 as an opportunity to build fresh long.

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities | Technically, post strong uptrend rally the Nifty has formed Doji candlestick pattern which clearly indicates indecisiveness between bulls and bears. However, the medium term texture of the benchmark index is still bullish and likely to continue in the short run. The Doji candlestick and intra-day charts formation indicates red flags near the 13000 level. Hence, a strong possibility of quick intra-day price correction is not ruled out in the near term. For the next few trading sessions, 12810 should be the sacrosanct level for the trend following traders. If it sustains above the same then uptrend texture is likely to continue up to 13050. And any further upside could lift the index up to 13200 levels. On the flip side, dismissal of 12810 could trigger correction up to 12700-12650 levels.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities | The short term trend of Nifty is choppy and the market is expected to move in a range of 13100-12800 levels by next week. The study of long term charts like weekly and monthly timeframe signal crucial overhead resistance for the market around 13100-13150 levels. The lower area of 12850-12750 is going to be an important base for the Nifty and a decisive move below this area could open a sharp downward correction in the market.

Nirali Shah, Senior Research Analyst, Samco Securities | RBI’s MPC meeting is scheduled next week and market participants would want to take cues from the likely inflation trend and any upward revision of growth forecasts to plan their next move. There is a high probability that the RBI would maintain an accommodative stance given the economy is slowly recovering and facing inflationary pressures. Markets are not likely to show significant movement in either direction given that there is very little room for a rate reduction. Infact markets are expected to enter a holiday mood with no major directional moves in the weeks to come. Stock-specific sectoral rotations are likely to unfold in the near term. Investors are advised to increase their weights on IT, Pharma and resilient private sector banks which might see some traction.