Nandish Shah, HDFC Securities.
On October 11, the market saw a rise for the third consecutive day and it closed at a new high of 17,946. Since the Nifty has been making higher tops and higher bottoms since the past months, its intermediate uptrend remains bullish. Nifty is forming above the 20- and 50-day EMAs, which are also indicating a continuation of the uptrend.
The 14-Month RSI (Relative Strength Index) is not looking very overbought at 80. Along with this, it is below its previous highs of 2007 and 2014. There are also signs of further upside in the coming months and weeks ahead. The intermediate upside target for Nifty is seen at 18,200 and 18,450.
On the options front, put writing has been seen at 17,600-17,700. During the last correction, Nifty was seen getting support around 17,600 and from here it showed a bounceback. This level also coincides with the 20-day EMA at 17,630. In view of this, we feel that as long as Nifty remains above 17,600, the short term trend will remain strong.
Meanwhile, Bank Nifty has given a break out on the Daily Chart breaking the previous resistance of 38,171. We can see Bank Nifty moving towards 38,800 and 39,500 in the coming weeks.
Similarly, Nifty Mid and Smallcap are also seen in bullish momentum. So far in October, it has outperformed Nifty. So far in October, the Nifty has seen a rise of only 2 per cent. Whereas Nifty Mid and Smallcap have given 4 and 5 per cent returns in the same period. Out of the 7 trading days of October so far, the number of rising stocks has been higher than the number of shares falling in 6 trading days. We believe that the mid and smallcap may continue to rise further. In the coming weeks and months, the small-medium share may perform out.
In summary, the short-term trend of Nifty and Bank Nifty is likely to remain bullish. The next target for Nifty could be 18,200-18,450. In case of taking a long position in the index, place a trailing stoploss at 17,600 in Nifty and 37,500 in Bank Nifty.
Today’s three buy calls in which there can be huge earnings in 2-3 weeks
VIP Industries: Buy | LTP: Rs 544.40 | Buy this stock with stop loss of Rs 500, target of Rs 625. This stock can give 15% return in 2-3 weeks.
Rupa & Company: Buy | LTP: Rs 483.55 | Buy this stock with stop loss of Rs 450, target of Rs 545. This stock can give 13% return in 2-3 weeks.
Glenmark Pharma: Buy | LTP: Rs 534 | Buy this stock with stop loss of Rs 502 and target Rs 590. This stock can give 10% return in 2-3 weeks.
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