Santosh Meena of Swastika Investmart says that Nifty IT index is trying to make a base around the level of 26,200. But the information technology benchmark is still at risk of a further drop of 10 per cent. Along with this, he also talked about the further moves in Nifty and Bank Nifty.
Meena said in an interview to Moneycontrol that 50 per cent retracement of the COVID rally will be completed after another 10 per cent fall.
Talking about the next important support in Nifty, he said that a Bearish Engulfing candlestick formation was seen forming in Nifty on the weekly time frame. This indicates caution with regard to its fall. If it falls further, if the strong support of 17,300 is broken, then Nifty will find support at 17,150-17,000 below, from where long positions can be seen.
Technically, are you excited about the IT sector which has been volatile since the beginning of the calendar year?
In response to this question, Santosh Meena said that there has been a big weakness in the IT index this year. It is trading around 30 percent below its all-time high. It is now trying to make a base around 26200. However, we believe that it may see a further decline of 10 per cent. After a drop of 10 percent, it will complete the 50 percent retracement of the post-Covid rally.
What is your strategy in Nifty CPSE Index?
To this, Meena said that Nifty CPSE index is going higher due to buying in defense and power stocks. However, 2,800 is an important multi-month resistance level. We can see profit-booking taking place at this level. But if it manages to close above the 2,800 level, we can see fresh buying momentum in the PSU stocks.
He further said that its overall structure looks bullish. Therefore, buying should be done when there is any correction in the 2,650-2,600 zone.
Can Bank Nifty look to move beyond 45,000 in the current financial year?
Santosh Meena in response to this question said that Bank Nifty is leading. It had already reached its all-time high of 41,840. Its leadership is likely to continue. However, some profit-booking cannot be ruled out if global trends remain weak.
If there is a fall in Bank Nifty, it can go to the zone of 40,000-39,000. However, any correction in this will act as a zone of strong demand. I think this time there is a good chance that we can see Bank Nifty going up to 45,000 level in this financial year.
(Disclaimer: The views and investment advice given on moneycontrol.com are the personal views and opinions of investment experts. Moneycontrol advises users to consult a certified expert before making any investment decision.)