Nifty50 may see further downside, use intra-week dips as buying opportunity: Analysts

NEW DELHI: If Nifty fails to hold immediate support of 6868, then it may even fall down towards the next support of 6666 say technical analysts. However, shorting around the current level may not be a good idea and a short term reversal may be in the offing, they said.

Analysts: Nagaraj Shetty, HDFC Securities
Chandan Taparia, Anand Rathi Fin Services
Ashu Bagri, SBICAP Securities
What is in store: The formation of important bottom reversal pattern with other positive technical evidence in Nifty as per larger time-frame chart is indicating that the recent swing low of 7,241 could be an important bottom for the market. Any decline in coming weeks is unlikely to break sharply below 7241 levels, and there is a possibility of emergence of strong buying interest from the lower levels. We expect Nifty to move up from here and the potential upside targets for the Nifty is around 7800 and next 8000 levels, which could be achieved in the next 4-6 weeks.

What to Do: One may look to initiate long trade in Nifty and also in banking, realty, oil & gas, automobile & metals sectors for the reasonable upside targets.Any intraweek dips could be used for a buy on dips strategy.

What is in store: Now the Budget is the only trigger which may give a hope for stability to this falling market. But if that is not supportive and if it fails to hold immediate support of 6,868 then it may even fall down towards next support of 6,666 and lower levels which is 61.80% retracement of entire upswing of 5,119 (August 2014) to 9,119 (March 2015) levels.

What to Do: Few stocks which are comparatively holding the supports or having the nature to outperform the broader market are Bharti Airtel, M&M, Asian Paint, PidilitInd, Eicher Motor, HUL, Hind Zinc, JSW Steel, Lupin, Marico, Sun Pharma, Titan, TVS Motor and Yes Bank. While stocks which are having a weak structure and trading at multiple year low levels are ONGC, Oil India, Hindalco, DLF, BHEL, REC, Tata Steel and most of the PSU banks.

What is in Store: The Nifty future may find resistance around 7,305 and 7468 on the upside. It may find support around 6,776 on the downside. The nifty future has closed at the lower level of the weekly charts showing downtrend for the next week.If it remains below 7,133, then immediately on the downside it will find support at 6,732. A close below 6,732 can take Nifty to 6,474. Selling at higher levels is advisable in the band mentioned below. We assume a downward trading for the next week.

What to Do: Broader trading range for the week: 67327391.Immediate probable trading range: 6474-7792. Buy UPL; target409; stop loss 365.Buy Nilkamal; target1110; stop loss 1018. Buy Timken; target Rs 450 and stop loss Rs 417.