Rohit Srivastava, the Founder of Strike Money Analytics and Indiacharts, advises investors to focus on navigating short-term market fluctuations. He suggests that dips present opportunities, as market movements are rarely linear. Over the past two sessions, Nifty has faced resistance around the 100 DMA levels, raising questions about the likelihood of a breakout, especially considering the strong performance of Nifty Bank.
According to Srivastava, the Nifty is encountering immediate resistance at approximately 23,400. This recent movement, characterized by significant gaps, indicates the need for some consolidation before further advancement. Historically, large gap movements often do not lead to sustained progress. Therefore, a reduction in volatility from 500-600 point fluctuations to the more typical 50-100 point range would likely precede a meaningful advance beyond the current trading zone. In the meantime, the market may continue to fluctuate within this range, with resistance at 23,400 and 23,600, and support around 22,800.
Srivastava notes that predicting what will drive these movements is challenging, as market dynamics can often exceed expectations, bouncing back more than 61%. For the Bank Nifty, two key levels are being monitored: 52,750 and above that, 53,174. These levels will determine whether a sustainable movement is possible or if a near-term shock remains for financials. The banking index has outperformed by not breaking the March low, unlike the Nifty, highlighting its strength. However, consolidation may persist within the stated levels unless the index surpasses 53,174, suggesting a continued upward movement in banking.
Discussing life insurance companies, Srivastava remarks on their current performance, with recent data from ICICI Pru indicating positive trends. Companies like HDFC Life and SBI are doing well, prompting considerations for fresh long positions. He emphasizes that despite short-term volatility, the financial sector, including insurance companies, remains an outperforming segment. Investors should seize opportunities during market dips in segments they favor, such as non-banking financial companies (NBFCs). Overall, Srivastava advises waiting for dips as nothing moves in a single direction consistently, thus creating opportunities for investment.
