The market should go into a bit of a short-term grind and short-term consolidation. But if supports hold on, then there could be a chance that you might see a push back to new highs yet again for the indices, says Kunal Bothra, independent market expert in an interaction with ET NOW. Edited excerpts:
ET Now: What do you make of the market movements and what levels should we brace ourselves for?
Kunal Bothra: I believe that the index is broadly consolidating. Post three weeks of a strong rally the indices are going through a bit of grind. A lot of signals have been mixed in the last week. On one hand, you saw a recovery in the US markets, especially Dow in the second half of the previous week. But our markets went through a phase of correction.
Look at the internals of the markets, Nifty IT index is showing signs of strength, but predominately stronger ones like cement, etc, are the stocks which saw a correction in the second half of the week. So the signals are getting a bit mixed for the index. But when you look at Nifty levels, we have not broken any key supports on the short-term charts. So first and foremost support, I believe Nifty is closer to the 11,700-11,750 zone. We tested that level on Friday but saw a good recovery on intraday basis.
The candle-stick pattern for Nifty on Friday closing basis is also positive. It is a bullish hammer pattern. So a lot of positives are coming across for the index. The good part about the markets going forward is that for every 101-150 points lower on the index you have strong support. There is gap support and price space support for the index. So, the market should now go into a bit of a short-term grind and short-term consolidation. But if these supports hold on, then there could be a chance that you might see a push back to new highs yet again for the indices.
ET Now: Indiabulls Real Estate saw a nice uptick on Friday. However, it gave up all of those gains and ended the trading session in the red with deep cuts. What do you make of the movements seen over there? Also, IB Housing too saw a lot of volatility in Thursdays trading session as NBFCs cracked, and then on Friday as the rebound was followed by some more selling action. What do you make of these movements?
Kunal Bothra: IB Housing and IB Real Estate in terms of short term, as well as medium-term chart patterns, are in complete contrast because the setup for Indiabulls Real Estate is becoming very positive. Since the stock bottomed out closer to Rs 75-80, the volume texture has changed, and prices are moving into a stable uptrend. It has even crossed the long-term averages quite easily with high volume push. Indicators are extremely supportive for the stock price. Fridays selling was maybe the case where you look at the build-up in terms of volumes on the anticipation of the news, and when the news comes out you see some profit booking.
So, the candle-stick pattern on Friday is also slightly negative, but that should probably have an effect just for the next three to five trading sessions. The stock might come back to support at the Rs 115-120 zone. There it should see one more level of buying. Stock comes back to say support zone which is at Rs 115-120 zone, where it should see one more level of buying.
For Indiabulls Housing, the chart patterns are a bit different, because every round of rally Read More – Source