Nifty bias to remain negative till it breaches 22,500, says Ajit Mishra

Nifty50 outlook: On the downside, the 21,850-22,150 zone is anticipated to provide support. Traders are advised to maintain caution

Nifty: CMP: 22,302.50

The Nifty has been gradually edging lower following a retest of its record high, nearing the lower boundary of the upward channel at around 22,150. A significant spike in the volatility index, India VIX, has altered the sentiment and is likely to exert further pressure.
 

Despite this, stability in global markets, coupled with the resilience observed in defensive sectors such as IT, FMCG, and pharmaceuticals, is limiting the pace of the decline.
 

We anticipate some consolidation in the Nifty at this juncture, but the prevailing bias is expected to remain negative until we firmly surpass the 22,500 level. On the downside, the 21,850-22,150 zone is anticipated to provide support. Traders are advised to maintain a cautious approach and uphold hedged positions.
 

Stocks Recommendations
 

BERGER PAINTS (I) | LTP: Rs 494 | Sell Futs | Target: Rs 470 | Stop-loss: Rs 506

We are seeing noticeable pressure in paint stocks and BERGER PAINTS is trading in sync with the move. It has resumed downward momentum after retesting its previous resistance zone. Also, it has registered a fresh breakdown with sharp rise in volumes. The confirmation oscillator, RSI, has also given a bearish crossover, which further adds to the negative bias.

BIOCON LIMITED | LTP: Rs 307 | Buy | Target: Rs 340 | Stop-loss: Rs 288

The pharma pack is showing noticeable strength and BIOCON is finally seeing a catch-up move. It has witnessed a breakout from a long consolidation range, with a sharp surge in volumes and also crossed the hurdle of a long-term moving average (200 WEMA). All indications are in favor of a steady-up move.
 

ICICI PRUDENTIAL LIFE INSURANCE COMPANY | LTP: Rs 587 | Buy | Target: Rs 630 | Stop-loss: Rs 568

ICICIPRULI has been witnessing gradual recovery for the last one year and outperforming its peers as well. It has witnessed a breakout from the elevated basing pattern and has also reclaimed its short term moving average (20-DEMA) suggests momentum in place. It looks set to test the previous swing high.


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Disclaimer: Ajit Mishra is SVP-Reserach at Religare Broking. Views expressed are personal.

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