Chartist Talks | CDSL is expected to shortly exceed its all-time high due to a very bullish chart structure

 Chartist Talks | CDSL is expected to shortly exceed its all-time high due to a very bullish chart structure

On a weekly closing basis, CDSL already recorded a new all-time high last week. According to Vinay Rajani, "we don't expect a major correction in the stock in the near term."

The positive momentum phase of Central Depository Services Limited (CDSL) is expected to continue in the next days, as optimistically stated by Vinay Rajani, CMT, senior technical and derivative analyst at HDFC Securities, in an interview with Moneycontrol. CDSL is expected to exceed its previous all-time high of about Rs 1,688.

The chart structure, in Rajani's opinion, is quite positive. "We don’t expect major correction in the stock in the near term."

Vodafone Idea has seen growth for the ninth consecutive month. Based on the chart structure, there is a greater chance of going above the resistance level of the swing high, which is Rs 16.80. According to the financial market expert with over 16 years of expertise, long positions that are now open may be kept with a stop-loss of Rs 12. Takeaways from the conversation:

Do you believe that the Bank Nifty will correct to create fresh, higher lows after hitting the 43,700–44,000 zone next week?

The Nifty has verified higher peaks and higher bottoms on the daily charts, indicating a reversal in the short-term positive trend. Additionally, Bank Nifty was able to close above its 200-day exponential moving average (EMA). Bank Nifty touched a low of 42,105 on October 26 after plunging below the key trendline support of 43,800 on October 19.

The prior support level of 43,800 is now anticipated to function as resistance for the Bank Nifty in the short term, per the change of polarity rule. Given its downward sloping nature, the 50-day Bank Nifty EMA is projected to align with the trend level of 43,800 in the next days. It is now situated at the 44,000-odd levels. Consequently, we may conclude that the 43,800–44,000 zone has a significant barrier.

In response, the Bank Nifty is anticipated to close in on the range of 43,700–44,000 the following week. On the medium-term time frame, the chart's structure remains more bearish with lower tops and lower bottoms, therefore we need to watch to see whether the resistance of 44,000 is being broken or not. The index's recent increase seems to be more of a retreat rally.

Will the 19,500–19,600 mark serve as a significant upper boundary obstacle for the Nifty50? Next week, will the index be able to maintain its higher levels?

Over the last week, there has been a significant build-up in the Nifty Futures, as we have seen a 7.5 percent increase in Open Interest and a 0.96 percent climb in Nifty, ending a two-week losing streak. Over the last week, the Nifty Open Interest Put call ratio was constant at 0.96. On November 9, put writing was seen near the 19,000–19,200 levels among the Nifty weekly options. Consequently, the 19,000–19,200 zone is probably going to serve as a solid support level over the next several weeks on the downside.

Conversely, the Nifty is probably going to encounter some early resistance around the area of 19,400–19,500, where calls have been placed.

FIIs saw a lengthy build-up in the Nifty Futures sector last week, as they net purchased Rs 610 crore worth of Open Interest, increasing it by 26,069 contracts. Conversely, they have opened new short positions in the Bank Nifty futures, where they have sold net of Rs 968 crore, increasing their open interest by 22,689 contracts.

The Nifty's 50-day EMA is situated around 19,450, and in the near run, this level may potentially provide resistance. With lower top and lower bottom formations, positional charts provide an overall bearish structure for the Nifty. As a result, it is unlikely that the Nifty will hold above the 19,500–19,600 range next week. Lessening the length of the lengthy commitments in the 19,500–19,600 resistance zone might be wise.

In November, would there be a breakthrough over 54,000 on the Nifty FMCG index?

The Nifty FMCG index has been stabilizing in the constrained range of 51,000–52,800 for the last three months. For the last three months, the index has been trading close to its 50-day EMA (51,735). In the absence of a breakthrough over 52,800, which would validate the breakout from the consolidation, we may anticipate that the current pattern of consolidation will continue.

The FMCG Index seems much stronger in comparison to the Nifty and Bank Nifty charts when we compare their setups. In the short run, we anticipate that the FMCG sector will beat the benchmark indexes.

Your two really wise wagers for Diwali 2023...

Equitas Small Finance Bank and Indian Oil Corporation.

Do you think Vodafone Idea will surpass the swing high it reached in 2021?

The stock has increased for eight months running. During this time, Vodafone Idea had a 147% increase in value, rising from Rs 5.8 to Rs 14.35. The stock has lately broken above and maintained above the critical resistance level of Rs 12.50.

The previous swing high, reached in 2021, was Rs 16.80. Based on the chart structure, there is a greater chance of going above the resistance level of the swing high, which is Rs 16.80. Current long positions may be maintained with a stop loss of Rs 12.

Do you believe the correction for Petronet LNG is complete?

Since September 2019, Petronet LNG has been in a long-term restructuring phase. Approximately around Rs 180, the lower band of the consolidation might serve as a good medium-term support for the stock.

Following its latest swing high of Rs 254, the stock has seen a drop of more than 23 percent. It cut quite close after that and entered the oversold area. Numerous swing lows have occurred between Rs. 180 and Rs. 190, which may provide support throughout the present decline in the Petronet LNG price.

Is CDSL heading for its peak before entering a significant corrective phase?

On a weekly closing basis, the stock set a new all-time high last week. The stock is now experiencing a strong momentum phase, and it is anticipated that in the next few days, it will exceed the previous all-time high of Rs 1,688. The chart structure is quite positive, and we don't anticipate a significant fall in the stock price anytime soon.