Sneha Seth from Angel One has analyzed the recent movements in the Nifty 50 and Nifty Bank indices. According to Seth, if the Nifty index continues to correct or holds below the 22,000 mark on a closing basis, there is a possibility of a further decline towards the 21,400 to 21,500 zone. This situation suggests that traders should remain cautious, limit their aggressiveness, and be selective in their trades.
She notes that the banking index, which had been providing support to the overall market, experienced a downturn. Seth highlights that there has been a shift in foreign institutional investors’ behavior; initially buyers, they have begun to add short positions in index futures. This is evident as the long-short ratio, which was around 40, declined to 29 and may decrease further. Given these conditions, she advises traders to stay light and avoid aggressive positions in the index.
As for Nifty Bank, Seth identifies a support zone around 48,000, while an upward move above 50,700 to 50,800 might indicate potential buying, with a significant movement over the 52,000 mark being especially noteworthy. Resistance is anticipated at approximately 50,500, forming a consolidation range for Nifty Bank. Any follow-up buying above the resistance zone could positively influence Nifty.
Finally, Seth mentions being selective in stock picks, highlighting Godrej Consumer Products. Despite the market correction, this stock has shown resilience. She notes a resistance at the 1180 zone but suggests that the stock could surpass this level based on recent volume trends. She recommends a long position in this stock, with a stop-loss around 1124 and a target of approximately 1220.