BackNifty 50 may hit 20,600 in next leg of rally, says Kavita Agrawal of exp-invest.in
Nifty's momentum is bullish. The level is 20,000 is a major psychological resistance.
PremiumThe underlying momentum of Nifty is quite bullish, said Kavita Agrawal, CMT CFA, CEO of exp-invest.in. In an interview with Mint, Agrawal said swing trading is a high-risk risk high-reward alternative to options trading which is high-risk low reward.
Edited excerpts:
What are your predictions for Nifty? Where do you see the index around Diwali this year?
The underlying momentum of the Nifty 50 is quite bullish. The daily timeframe suggests this is a mere breather and the level is 20,000 is a major psychological resistance so it’s natural that the market has taken some correction. My target for Nifty is 20,600 in the next leg of the rally.
When do you expect the Bank Nifty index to hit a fresh record high? What are the key supports and resistance?
Bank Nifty's key support is 44,200, the 100EMA (exponential moving average) on the daily timeframe.
The target is 49,500 owing to a strong trend line resistance which caused the corrections in Oct ‘21, Feb ‘21, May ‘19, Jan ‘18, Feb ‘15, and Nov ‘10.
Each of these corrections was in the range of 12-60 per cent. That’s quite a significant correction on a broad market index.
Share your views on swing trading. Do you think the Indian traders should turn more toward active swing trading instead of options trading?
The whole landscape of options trading is designed in such a way that a small trader will lose money.
The fact is that even if your direction analysis is right due to theta decay a small trader will still lose.
To succeed in trading we need to buy low and sell high, in options trading you’re trying to go uphill on a slippery slope.
Swing trading on the other hand rewards you for good directional analysis and offers optimum portfolio growth when done with stringent risk management.
Swing trading is a high-risk risk high-reward alternative to options trading which is high risk low reward.
What are the risks associated with swing trading? Who should not try it?
Swing trading offers immense opportunities for everyone to participate in stock trading with a frequency which suits their lifestyle and workflow. However, it involved considerable market risk.
Anyone who does not have disposable income should not opt for any kind of trading in the stock market. The best choice for anyone with a capital of less than ₹2 lakh is index fund investing for the long term.
Additionally, if someone doesn’t have a high level of trend analysis expertise and doesn’t work with a registered analyst should completely avoid swing trading. Managing your positions with an analyst’s insights is a good way forward.
What are the key technical factors that you consider while picking a stock?
I don’t like to use too many diverse indicators. I believe that is like making the charts repeat the same message in different languages, it’s unnecessary and cluttering.
I do however like to use multiple timeframes to analyse my indicators and use alignments to take trades. My primary indicators are RSI (25 period) and 5 EMAs (20,50,100,200,500).
I analyze these simple indicators on six timeframes starting from largest to smallest (monthly, weekly, daily, 75m, 15m, 3m).
In addition to this, I analyse the volume and watch out for key support and resistance levels using a combination of horizontal levels, one-directional trend lines and EMAs.
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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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