A triple Doji candle formed in the last three days, with a larger-bodied Doji candle on Friday, a close below the last two days, and the MACD histogram showing exhaustion, all signaling a potential near-term correction, saidAnand James, Chief Market Strategist atGeojit Financial Services.”Any short-term correction, if it happens, could be shallow, and such dips may be used to add positions,” he added in an interview with ETMarkets. Edited excerpts:After the consolidation seen last week, how do you read the momentum in the coming week? What are the key levels to watch for Nifty traders?Although Friday ended in the red, completing three consecutive days of descent, the preferred view is that this marks an acknowledgment of the importance of the 50 SMA, from which the downward turn began. Also, the quick bargain buying seen in the dying hours of Friday halted the descent at the 38.2% Fibonacci retracement of the 27 Jan-05 Feb ascent. These two factors set up the potential for a large move in the coming week.A broad-based recovery move is supported by the fact that about 60% of the NSE 500 constituents closed at least 1% above their respective lows on Friday. This setup encourages a potential upside target of 24,380–24,426, with 24,226 (02 Jan high) offering resistance. Conversely, failure to clear 23,800 or remain above 24,020 after an initial burst could deflate the upside momentum.Do you think the weakness seen in banking stocks on Friday after the RBI rate cut is likely to extend in the week ahead?The triple Doji candle formation in the last three days, a bigger-bodied Doji candle on Friday, a close below the last two days, and the MACD histogram showing exhaustion all signal a near-term correction. Major index constituents like HDFC Bank, ICICI Bank, SBI, and Kotak Bank show signs of short-term correction and could lead the index down toward 49,600–49,000. However, weekly charts remain positive, with the Stochastic Momentum Index moving above zero, suggesting that any short-term correction, if it happens, could be shallow. Such dips may present opportunities to add positions.The pharma index gained strength as a defensive play amid global volatility. Do you see a trade in Nifty Pharma ETF from a short-term perspective?The pharma index looks positive in the short term, forming a large-bodied green candle on the weekly chart. The weekly MACD histogram shows exhaustion at lower levels, and the Stochastic Momentum histogram shows the first reversal bar, indicating a continuation of the current pullback. The pullback in theNiftyPharma index is expected to continue upwards toward 22,500, driven by stocks like Cipla, Zydus Life, Divi’s Lab, Dr. Reddy’s, Torrent Pharma, Mankind, and Lupin.The Pharma ETF has seen a bullish engulfing pattern on the weekly chart, with the Stochastic Momentum histogram showing the first reversal bar, suggesting more upside in the coming weeks, possibly towards 22.8 and 23.2.The list of weekly losers is full of rail
Mer. Feb 12th, 2025
