The Nifty50 might have fallen by about 1,000 points from the highs of 18,604 on 19 October to 17,613 on 29 October, before bouncing back, suggests that bulls have plenty of firepower at crucial support levels.

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The index barely fell by nearly 1,000 points or a little over 5 per cent since October 19 indicate that there is a strong support near 17,100-16900 levels. Investors should use the dip to buy into quality stocks which can better upside.

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Tracking the fall, the Nifty50 slipped below its 30-Day SMA of 17,952, while it is still trading above 50, 100 and 200-Day SMA.

The Nifty50 underwent profit booking after hitting a record high of 18,600 levels in October. In line with the selling pressure seen in benchmark indices, even broader market indices mirrored the benchmark’s move and saw profit booking after witnessing 25 per cent rally over the past two months.

“Going ahead, we do not expect the index to breach the key support threshold of 17100-16900. Historically, we have observed that the intermediate correction is an integral part of the structural bull market that makes the market healthy,” ICICIdirect said in a report.

“Since May 2020, on three occasions, Nifty has clocked new highs after undergoing average 9% correction. In the current scenario as well, we expect the index to maintain the same rhythm and challenge the 18,600-mark underpinned by rejuvenated traction in BFSI, metal, auto, capital goods, realty which would drive the index higher,” the report highlighted.

ICICIdirect advises investors to start accumulating quality stocks and further dip should be capitalised as buying opportunity as we expect Nifty to hold the 17100-16900 range.

The brokerage firm highlights over 40 bargain buys across 11 sectors, which investors can look at buying on dips. Some of the stocks in the bargain list include names like Bank of Baroda, IndusInd Bank, Federal Bank, TCS, Bharti Airtel, Bosch, BHEL, Cipla, Tata Consumer and Dixon Technologies.

BankNifty Signals Acceleration:

The Bank Nifty has registered a breakout above its 7-months range (37708-30405), indicating rejuvenation of the uptrend. The index hit a record high of 41,829, then saw some profit taking at higher levels.

Experts are of the view that the momentum in NiftyBank remain intact after the recent breakout, and the next target is placed above 44,000 on the index.

“We expect the Bank Nifty to continue its outperformance over the benchmark indices. This structural improvement makes us confident of revising our target upward at 44600 by December end as it is the measuring implication of the last seven months range breakout,” said the ICICIdirect report.

The index in the process has generated a breakout above the rising trendline joining the major highs of January 2020 (32502) and February 2021 (37708), signalling acceleration of up move.

“The formation of higher peak and trough on the larger degree chart signifies elevated buying demand that makes us confident of revising support base at 39,200 levels being the confluence of (a) 50% retracement of the recent up move (36,876-41,829) (b) the recent consolidation base (c) the recent long-term trendline breakout area is also placed around 39,200 levels,” added the report.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)