See further decline in Nifty if it slips below 7820-7830 levels: Mitesh Thacker

In an interview with ET Now, Mitesh Thacker, Technical Analyst, miteshthacker.com, shares his views on the markets and some stocks. Excerpts:

ET Now: The pressure continued in Friday’s session. Do you think it extends into early Monday and possibly even Tuesday?

Mitesh Thacker: That is a possibility. One thing is sure that it has been a very choppy ride. While the week was truncated and the decline was only about 1% or so, the overall movement in the Nifty was much bigger and we saw swings happening in both directions.

There has been some kind of momentum breakdown on the medium-term charts. So, if the price starts breaking down, which is below 7820-7830 on closing basis, I would be slightly more negative and look at further declines. The possibility of this correction to the levels of about 7700 and below would be very strong.

ET Now: What is your reading of the entire IT pack and the way Infosys lifted the entire IT sector on Friday, any trading opportunities there?

Mitesh Thacker: Infosys was the one which lifted the entire IT sector and, therefore, that should be the number one trading opportunity. It had a very strong price and volume action. So technically it was quite positive. The news flow is over and extended on the positive side with significantly stronger buy signals being generated. Also, the stock managed to get past earlier highs and swing levels of 3830-3840.

So, the overall setup should be in favour of Infosys. I do expect this stock to head towards the levels of 3950-4000 in the next few days to come by and from a trading point of view, it will be a good buy with a stop below 3830. The other one, which could be interesting, is HCL Tech. 1750 is an important level on the charts for the stock. Once it manages to get past that, 1820-1825 would be a good short-term target.

ET Now: What do you think on the way Cairn has corrected and the way some of the OMCs have behaved, how do you expect the next week to be?

Mitesh Thacker: Apart from giving crude signals of underperformance, Cairn clearly had some kind of downtrend. If you look at the last few years of data and chart, it has had some strong support around the 270 mark. So maybe it will head towards 270 and then try to do some kind of bottom fishing. But if it starts breaking below 270, I would be looking at targets of sub-250 over here.

So the overall structure remains negative and again on rallies, 295-296 would be good levels to initiate fresh short positions. Coming to the OMC pack, I do like some of the stocks over here. HPCL made a fresh high and then it was sideways for Thursday andFriday, but the structure is quite positive. This one can still go up to the levels of 535-540 in the short term. Similarly, BPCL is a stock which has been more of sideways, but if it starts breaking above 685-690, you might see some kind of uptrend development.

ET Now: Give us your recommendations for the next week.

Mitesh Thacker: I have a buy on VIP, with a stop below 115, look for targets of 130 plus, and a sell on Motherson Sumi, with a stop at 380 for targets of around 345.