This week’s trading session started on a positive note and on Monday, the Sensex reached above 59,000 and the Nifty 50 above 17,600. There was some loss in the Indian stock market last week. Bank Nifty rose over 40,900 Broad sectoral indices witnessed a rebound as investors were prompted to add beaten-down stocks to the portfolio. Buying in FMCG, auto and banking stocks has led to bearish sentiment in capital goods and metal stocks. Overall, however, the outlook for global markets remains volatile ahead of the monetary policy outcome of the US Federal Reserve. The FOMC meeting is scheduled to take place from September 20 to 21. Another aggressive rate hike is expected from the Fed. In Tuesday’s trading session, Rajesh Palviya, VP – Technical & Derivatives Research, Axis Securities, made three buy recommendations.
On September 19, the Sensex closed at 59,141.23 with a gain of 300.44 points or 0.51%. The Nifty 50 closed at 17,622.25, up 91.40 points or 0.52%. Bank Nifty closed at 40,904.40, up 127.60 points or 0.31%.
According to Rajesh Palviya, Vice President of Technical and Derivatives Research, Axis Securities, on the daily chart, the index has formed a small bullish candle with shadows on either side which represents extreme volatility. The index is moving in a higher top and higher bottom formation on the daily chart, indicating a sustained upward trend in the medium term. The index broke below the upward sloping trend line in the previous day’s trading while it has not been able to break out of the 20 SMA placed at 17677, which is an important level to watch out for. The chart pattern suggests that if Nifty crosses the level of 17700 and sustains then it will be buying, which will take the index towards the level of 17800-17900. The key support for the day is near the 17550 level. However, if the index sustains below 17550, it may witness profit-booking, which will take the index to the level of 17450-17350. Nifty is trading above 50, 100 and 200-day SMA, indicating a positive bias in the short to medium term.
Palviya said Nifty remains bullish for the short term, hence buying on dips remains our preferred strategy.
“Daily Strength Indicator RSI is trending down and is quoted below its reference line, indicating negative bias,” he added.
Giving the Bank Nifty outlook, Palviya said, On the daily chart, the index has formed a small bullish candle with shadows on either side which represents extreme volatility as well as indecision among the participants about the direction. The index is holding the lower band of the ascending channel. Breaking and holding below the lower band of the rising channel would open downside and if the index holds the lower band of the channel it could move towards the upper band. The index is moving in a higher top and higher bottom formation on the daily chart indicating a short term upward trend. The chart pattern suggests that if BankNifty crosses the 41,550 level and sustains then it will be a buy which will take the index towards 41200-41500 level. The key support for the day is near 40850.
However, he added, if Nifty Bank index stays below 40850 then it may see profit booking which will take the index to 40700-40x levels. Bank Nifty is trading above its 20, 50, 100 and 200-day SMAs, indicating a bullish trend in the near term. BankNifty remains in an uptrend in the medium and long term, hence buying on dips remains our preferred strategy.
He also said, the daily strength indicator RSI remains flat and is below its reference line which indicates absence of momentum on either side.
Axis Securities Expert has given buy and sell advice of three stocks on 20th September.
Buy Poonawalla Fincorp Here With a stop loss of 323 target of 315 345
Buy Maruti Suzuki Here With stop loss of 9295 9180 target 9450
Welspun Corp Buy Here With a stop loss of 266 target of 255 280
The views and recommendations above are those of individual analysts, not Mint.
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