Nifty headed for 16,400 soon; IT, auto, and bank stocks may outperform, charts show

NSE Nifty 50 reached contemporary all-time highs earlier this month solely to witness revenue reserving from the highs and push the index decrease. Now after having seen a wholesome correction, the NSE Nifty 50 could quickly resume its northward march, and this time scale contemporary highs close to 16,400, stated brokerage agency ICICI Direct. “We anticipate the Nifty to take care of its northbound journey and regularly head in the direction of our earmarked goal of 16200-16400 vary, led by IT, BFSI, auto and infra,” analysts at ICICI Direct stated in a word. Earlier this month, Nifty climbed to fifteen,901 — an all-time excessive and has since witnessed a wholesome correction. Now technical analysts say the index faces resistance close to the 15,900 ranges.

Robust shopping for to emerge round 15,400-15,200

“The Nifty has rallied 12% over the previous two months main it into overbought territory. Due to this fact, intermediate bouts of volatility at greater ranges shouldn’t be seen as destructive. As an alternative, dips ought to be capitalised on as incremental shopping for alternative,” ICICI Direct stated. The brokerage agency anticipated renewed shopping for curiosity to emerge across the 15,400-15,200 vary as it’s a confluence of 61.8% retracement of previous 4 week’s rally (14,885-15,901), at 15,274 and previous 5 week’s low is positioned at 15,145.

Bouts of volatility anticipated

The trail in the direction of 16,400, nevertheless, wouldn’t be linear. ICICI Direct expects bouts of volatility if Nifty enters overbought territory and faces turbulence throughout April-June quarter outcomes forward. “Over the previous one yr such short-term volatility/consolidation at all times supplied incremental shopping for alternative. Therefore, we suggest sticking to high quality and, subsequently, adhering to purchasing on declines, as we anticipate sturdy shopping for demand to emerge round 15400-15200,” they stated.

IT, Financial institution, PSU shares in focus

On the charts, ICICI Direct stated that the IT index is positioned on the outperformer quadrant with enchancment in each relative and motion time period. “It’s anticipated to proceed with its outperformance,” they added. FMCG shares are additionally anticipated to proceed their up transfer together with PSU shares. “Financial institution index has consolidated for the final three weeks and are at the moment positioned on the Discount Purchase quadrant and are anticipated to renew its major up transfer,” the word stated.

The auto sector has moved from the impartial quadrant to outperform. This based on the report alerts a resumption of uptrend and gives a beneficial risk-reward setup. The high-flying pharma sector is positioned within the impartial quadrant.

Within the BFSI house, the brokerage agency has categorised SBI and Bajaj Finance as outperformers whereas Kotak Financial institution, HDFC Life, and HDFC are termed as cut price buys. Equally, TCS, Infosys, Mindtree, Sonata software are outperformers amongst IT shares whereas L&T Infotech is a cut price purchase.

(The inventory suggestions on this story are by the respective analysis and brokerage companies. Monetary Specific On-line doesn’t bear any duty for his or her funding recommendation. Please seek the advice of your funding advisor earlier than investing.)