Gaurav Ratnaparkhi: Nifty50 is set to test 17000 on the upside in the coming weeks: Gaurav Ratnaparkhi

In an interview with ETMarkets, Ratnaparkhi said, “Structurally, the Nifty50 will test 17000 at the upside in the coming weeks, and the bullish stance will hold as long as Nifty trades above 16400.” Edited excerpts:

A strong week for markets where bulls pushed benchmark indices up more than 2% each. What sparked the price action?
The Nifty50 started the week on a solid footing witnessing a brief consolidation in the 16400-16700 range. With this consolidation, the index tested multiple support parameters.

On the hourly chart, it formed a base near the intersection of the 40-hour exponential moving average and the hourly lower Bollinger Band.

The daily chart shows that the Nifty broke out of a bearish trendline at the beginning of the week and tested the same again.

There, the index formed an Engulfing Bull candle on June 2. Consequently, the Nifty jumped to the daily upper Bollinger Band on June 3.

Where do you see the markets heading next week? Do you see a similar momentum?
The Nifty is preparing to start its next move up after a short term base formation near strong support parameters.

The index shows a higher top and higher bottom formation on the daily chart, which is a bullish sign according to Dow theory. Also, the daily momentum indicators support further upside potential.

Structurally, the index will test 17,000 upwards in the coming weeks. The bullish stance will hold as long as Nifty trades above 16400.

The level of 16400, which previously acted as a resistance, now acts as a support on the principle of role reversal.

In terms of sectors, real estate and IT stocks saw buying interest. What sparked the price action? Do you see the momentum continuing in the coming week?
As you rightly pointed out, some real estate and IT stocks have seen strong traction over the past week. Both sector indices have been hit hard in recent weeks.

However, they were building a foundation for themselves on the daily chart. Also, the daily momentum indicators had developed positive divergences on the respective charts.

So both sectors reversed their trend over the past week. While the real estate space may see a brief consolidation before rising further; IT is the theme that could remain in the lead in the coming weeks.

rose more than 30% in a week. What drives the price action and what does it look like in charts?
Timken India had corrected from the March high of 2305 and the correction continued through mid-May. After the decline, the stock established a base near the intersection of the 40-week exponential moving average and the weekly lower Bollinger Band.

The stock then resumed its larger uptrend. Last week’s rally was also accompanied by volumes.

For example, the stock is expected to remain on the upward trajectory and could move towards 2800. The short term support is placed at 2400.

Do you think the market has bottomed near 15700-15800 levels?
Despite several attempts during the month of May to break through the 15700-15800 support zone, the Nifty managed to hold onto it. The index gained strong support from the March 15671 low.

Consequently, the Nifty formed a base triangle there and the trajectory turned upward. So there’s a good chance we’ve seen a bottom near 15700-15800. The same will be confirmed once the Nifty rises above 17000.

Thursday we also saw a Fat Finger trade. How can you avoid episodes like this and what’s the way out if someone made a mistake?
The main thing that is needed to prevent this kind of episode is to have a strong mechanism that will detect and kill such fat finger trades before they can enter the system and before they can be sent to the exchanges.

Having such a robust mechanism will prevent a mistake from turning into financial losses

(Disclaimer: The experts’ recommendations, suggestions, views and opinions are their own. They do not represent the views of Economic Times)

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