Manav Chopra, Head – Research, Indiabulls Ventures, sees selling pressure at 10700 on the upside. Chopra tells ET Now that on the lower side, a short-term correction could take the markets to 10400 or 10450 in next few weeks.
In terms of technical, where are the markets headed?
The markets have breached key support levels after a sustained retraced rally from the levels of 10100 towards 10800. After extending its move, the market had started to correct from its overbought zone. Usually such a move looks to be more or less corrective in nature.
We expect a series of selling pressure at 10700 on the upside which was its previous support levels. On the lower side, we could see a short-term correction which could take the markets towards the levels of 10400 or 10450. That is the immediate target that we are looking at, for the next couple of weeks.
Bajaj Finance has seen a very good uptrend. After a good sideways consolidation in the stock, a breakout has been observed on a weekly and monthly basis. This was accompanied by good volume backed by good news event.
Going forward, the momentum will be there in the stock, I recommend a buy-on-dips approach. There is an immediate support at 2100 on the intraday basis. One should definitely look to buy on any dip towards the support levels. Going forward on a medium-term perspective, the stock could rally towards 2180 and possibly even 2250. Overall. the oscillators and the trend is still bullish in this stock.
Any call on PNB? That is a stock which went down this week?
The stock has been a complete underperformer and with the kind of decline it has seen, I do not recommend initiating any fresh longs in this stock. It is in very deep oversold levels. There could be some sort of a bounce back or a dead-cat bounce, but I do not see the stock exceed Rs 85-86 levels.
Even though it is an important level, it has to be watched in a medium-term perspective. But given a choice, one should avoid getting longs as this PSU space settles down for the near term. So far, the PSBs and PNB in particular, have been observing a series of declines. We could see more pain and the oscillators on high time-frame charts are indicating some more downside. I sense that PNB could even touch the levels of 68 to 65 in the near term.
Do you think the pharma sector is coming to a bottom?
I do not think so. At the current levels, we have definitely observed a series of declines since past couple of months and in fact majority of the stocks have already witnessed a sharp decline from its all-time peaks. At the current levels, from a weekly and monthly perspective, there is no sense for any bottom formation.
There are some short-term formations, which are hinting for a bounce but when we are looking at the long-term support lines or channels, they are yet to be reached. In such a phase, it is very difficult to call for a bottom. We could still see some pain at least in the near term. The momentum is still bearish and stocks like Lupin, Sun Pharma could see another decline of another 10% in probably next few weeks or months.