After relentless selling in recent days, the Nifty has temporarily paused its decline due to an oversold chart setup. However, the index closed significantly below the critical breakdown level of 19250. As long as it stays below 19250, the market may continue to be inclined towards selling on any upward movements. On the downside, a resumption of weakness is expected if the index falls below 18800. This is because put writers are likely to defend the Nifty with substantial positions at 18800, with immediate support placed at 19000.
After a consolidation breakdown on the daily chart, Bank Nifty experienced a 2000-point correction in a short span of time. The index appeared somewhat oversold, leading to a pullback on Friday. However, the sentiment remains predominantly bearish, and any upward movements may still face selling pressure. On the upper side, 43000 could serve as a significant resistance level, as call writers have established substantial positions there. Support can be observed at 42500, where put writers have a strong presence.
1) Buy GNFC 665 TGT 700 SL 642
The GNFC stock has displayed a strong resurgence, characterized by a long-legged doji candle testing its previous breakout resistance. Notably, the subsequent candle is significantly bullish, indicating a strong comeback by the bulls. Currently, the stock is trading above its 20-day EMA, with an RSI of 62, signifying strong momentum. Consider establishing a long position in the stock within the range of 660-665, while setting a strict stop loss at 642. On the upside, aim for a target price of 700.
2) Buy L&TFH 137 TGT 155 SL 131
The stock is following a higher high and higher low pattern on the daily chart, which is a bullish sign. The positive pattern is accompanied by good trading volume, indicating strength in the price action. The Relative Strength Index (RSI) indicator on the daily chart is in the positive zone, supporting the bullish sentiment. Consider establishing a long position in the stock within the range of 136-137, while setting a strict stop loss at 131. On the upside, aim for a target price of 155.
Also Read: Buy or sell: Sumeet Bagadia recommends three stocks to buy next week
3) Buy RVNL 157 TGT 175 SL 150
The stock has reversed from a prior demand zone, indicating the potential for an uptrend to continue. Furthermore, the price has crossed back above the 50-day simple moving average (50SMA) on the daily chart. Consider establishing a long position in the stock within the range of 155-157, while setting a strict stop loss at 150. On the upside, aim for a target price of 175.
The author, Rupak De is Senior Technical analyst at LKP Securities.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 29 Oct 2023, 05:05 PM IST