Nifty Can Experience Breakdown If It Snaps Support Level, Says Analyst

The NSE Nifty 50 can experience a breakdown if it snaps the support level of 21,830, according to Jai Bala, chief market technician at CashTheChaos.

The markets will be in a comfortable position, provided the benchmark holds above the 21,830 mark. But if it breaks these levels, then it will become a matter of concern, Bala told NDTV Profit on Wednesday.

Presently, the markets are unlikely to hit the 22,500 level, he said, mentioning 22,200 as a very strong level of resistance.

The benchmark stock indices recouped from loss to gain on Wednesday, tracking recovery in heavyweights Reliance Industries Ltd., HDFC Bank Ltd. and Axis Bank Ltd.

Bala recommends a 'buy' call for shares of Bharat Petroleum Corp. at a stop loss of Rs 550 apiece and a target price of Rs 702 per share. He has a 'buy' call for Hindustan Petroleum Corp., with a stop loss of Rs 440 apiece and a target price of Rs 610 per share.

"We are of the view that the market texture is bullish but in the near future, the 20-day simple moving average or 22,170/73,100, would act as a key resistance for the bulls," Shrikant Chouhan, head of equity research at Kotak Securities Ltd., said.

RIL has consolidated well in the last few years, according to Vijay Chopra, chief executive officer at Enoch Ventures Pvt.

Chopra highlighted that a large chunk of money has been invested in large-cap companies and the price of RIL, being the most-preferred choice amongst investors, could scale further. "The buzz that there could be an upward increase in the tariff in the telecom space—JJio will definitely be a major beneficiary out of the entire scheme of things."

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