Short term trend is still positive after Friday’s selloff as long as Nifty50 stays above 18000: Rupak De

“The short-term trend will, however, remain positive as long as the index remains above 18000. A fall below 18000 may take the Nifty into the consolidation zone of 17500–18000,” says Rupak De, Senior Technical analyst at LKP Securities.

In an interview with ETMarkets, Rupak said: “Friday's selling indicates an unwinding of the long positions by the FII. However, the short-term trend says that the short-covering spree, which started in the first part of the previous month, will likely continue in the near term,” Edited excerpts:

Indian market closed flat and in fact erased most of the gains of the week on Friday. What led to the price action?
The bears returned to the market, as the benchmark Nifty ended the last day of the week with a loss of 1%. Over the week, the Nifty remained volatile before closing flat for the week.

A profit booking around 18200 led to Friday's fall, which took Nifty back to the previous week's close.

Which are important levels that one should watch out for in the coming week on Nifty50 and Nifty Bank?
The short-term trend will, however, remain positive as long as the index remains above 18000. A fall below 18000 may take the Nifty into the consolidation zone of 17500–18000.

On the other hand, a rejection from the 18000 level may reintroduce a buying spree, which may take the Nifty back to above 18200; again, a decisive move above 18200 may take it towards 18500–19000.

In terms of sectors Consumer Durables rose in the week gone by while Commodities and banks fell. What led to the price action?
During the week, the consumer durable stocks witnessed a strong breakout, which may result in a short-term rally.

Meanwhile, some banks fell after HDFC Bank, HDFC Ltd merger updates. On the other hand, profit-taking in some commodity stocks was inevitable after a decent rally in the recent past.

ITC, ABB India, KEI industries touched 10-year high or lifetime highs. What should investors do? Time to buy?
The stocks have been moving with a lot of strength as they are making new highs. Over the short term, the trend will continue to remain in strength. However, rather than fresh buying at the current level, one should wait for a small correction.

How are FIIs placed in May for the coming week?
FIIs started the week as net buyers, which very much supported the market. On the other hand, Friday's selling indicates an unwinding of the long positions by the FII. However, the short-term trend says that the short-covering spree, which started in the first part of the previous month, will likely continue in the near term.

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