Sectors like consumer goods and IT are looking good

Kapil Shah, Technical Analyst, Emkay Global

Outlook: Looking at the patterns of the previous decline, the four recent falls had happened in the range of 12% to 14%. Nifty had decline around 14% in 9 of the previous 14 falls. Looking at the current fall which had started from 12,335 to 10,830, it had decline till now is 12.20%. So, looking at previous intensity of the fall, ongoing price-wise correction may mature soon. To support this hypothesis, the index had entered into potential support band of 10,850 to 10,600 range where buying interest can be garnered.

Strategy: After the strong price-wise correction there can be time-wise correction which can take place in the range of 10,600 to 10,800 and can be an opportunity for accumulation. Looking at relative strength of sector in context of Nifty, some sectors like Consumer goods and IT sector looks good. On contrarian view basis, realty sector is forming a reversal sign. Pharma sector is forming a potential Inverted Head & Shoulder pattern which is bullish reversal sign. Stocks like Bajaj Electric, Oberoi Reality, Petronet LNG look good to accumulate.