Dharmesh Shah, a technical head of ICICI Securities, believes that the slight decline in the Nifty 50 is currently a healthy consolidation. He said that the Nifty’s 20-day EMA (experiencedly moving average) shows a slow retrace, its strong price structure. According to Shah, at this stage any decline should be understood as a chance for shopping in shares with good quality and strong earnings growth. He estimated that the Nifty would gradually grow up in the coming weeks and go up to 25,800 levels.
Due to the gap-down opening in the market on Friday, the question arises whether the Nifty will break the important support level of 24,800 next week?
On this question, Dharmesh Shah said that due to uncertainty, earning season and tariff related events regarding trade agreements between Indo-US, there may be further ups and downs in the market. He further said, “In the last 10 business days, the Nifty has retracted only 50% of its previous boom. It is clear that it is only a healthy consolidation. There is strong support at the level of 24,900–24,800 and at the moment the chances of going below are less.”
1. Power Finance Corporation (PFC)
Dharmesh Shah said that this stock has fallen by 38 per cent in the last about 11 months, but now it seems to be making a strong base near the 100-week EMA. This indicates that shopping at the lower levels is interested in. Despite the recent upheaval, the stock managed to stay on the important support zone of ₹ 360 – ₹ 370, which shows the demand for shopping.
The important thing to note is that the stock has broken the seven -month -old falling trendline, which has occurred after getting support near the retracement level of ₹ 225 to ₹ 580. This indicates that the correction of correction is probably complete and now the next ups of upsuv can begin.
Later, we hope that the stock will slowly move upwards and go to a target of Rs 478. This is a 50% retracement of its previous decline (₹ 580 – ₹ 357). Strong support is being seen at 388 rupees at the bottom.
2. Tata Power Company
Dharmesh Shah said that the power index has shown vigorous recovery after the fall of two quarters. In the last two months, this stock is creating a strong base around 200-days EMA, which is now taking the shape of a rising channel. We hope that the stock will breakout upwards from this channel and move towards a target of Rs 445, which is the upper limit of the Rising channel and is close to Rs 447 on December 2024. Meanwhile, the level of Rs 374 remains strong support, as it is a 50% retracement of February to June rally (₹ 326– ₹ 416).
Disclaimer: The ideas and investment advice given by experts/brokerage firms on Moneycontrol are their own, not the website and its management. Moneycontrol advises users to consult a certified expert before making any investment decision.