DHARMESH SHAH
HEAD-TECHNICALS, ICICI SECURITIES
Where is Nifty headed this week?
The weekly price action formed a hammer candle, indicating buying demand emerging from an 80% retracement of the last up move (19,230-20,222). Going ahead, we expect the index to trade with a positive bias and gradually head towards the upper band of consolidation, placed at 19,800. Further, a decisive close above 19,800 would accelerate upward momentum towards a record high of 20,222. We expect Nifty to hold the key support of 19,300.
What should investors do?
We believe recent healthy retracement has helped the index to cool off the overbought conditions. Thus, the focus should be on accumulating quality stocks amid ongoing global volatility. Sectorally, we remain positive on BFSI, consumption, power and PSU baskets, while IT and metal offer favourable risk-reward setups. On the stock front, in large-caps, we prefer HCL Tech, IndusInd Bank, DLF, Tata Motors, Hindalco, NTPC, L&T, and Titan, while in midcaps, L&T Finance, HEG, Gujarat Industries Power, Balkrishna Industries, Indigo, L&T Technology Services, EIH, Indo Count Industries are looking good.
RAJESH PALVIYA
HEAD-TECHNICAL DERIVATIVES, AXIS SECURITIES
Where is Nifty headed this week?
On the weekly chart, the index formed a small bullish candle with a lower shadow, indicating buying near the 20-week SMA. The chart pattern indicates that if Nifty crosses and sustains above the 19,750 level, it could witness buying, leading it to 19,900-20,00. . However, a breaks below 19,500 could witness selling, taking the index towards 19,350- 19,200. The weekly RSI indicator remains flat below its reference line, signalling a lack of momentum in either direction.
What should investors do?
One can take long positions DLF, Titan, TCS, Coforge, Eclerx, Maruti, TVS Motors, IndusInd Bank, Bajaj Finance, L&T Finance, BEL, L&T, Chalet Hotels and Mahindra Holiday. The Nifty strategy we are suggesting for October 12 expiry is the iron condor. This involves selling one lot of Nifty 19,650 call at Rs 94 and selling one lot of Nifty 19,700 put at Rs 104 and simultaneously buying one lot of 19,900 call at Rs 11 and buying one lot of 19,450 put at Rs 24. The maximum profit of Rs 8,150 will accrue if Nifty closes or expires at 19,650-700. Maximum loss is restricted to Rs 4,350 on close above 19,900 or below 19,450.
PRITESH MEHTA ANALYST, YES SECURITIES
Where is Nifty headed this week?
Nifty defended August’s low, the midpoint of the current three-digit Gann channel and rebounded off the week’s low. The reversal in our customised breadth and Nifty Top 10 index suggests continuing the recent pullback towards the 19,900-19,950 zone. On the point & figure chart, Bank Nifty has defended 43,800 zones. The monthly seasonality trend for Bank Nifty shows an average return of about 10% in the last ten years in October. A pullback move in index biggies from the banking space will likely provide much-needed respite for Nifty.
What should investors do?
Nifty Realty made a sharp comeback in the previous week’s trade, rebounding off the November 2021 peak. The ratio chart of Realty versus Nifty shows a continuation of outperformance in real estate stocks. DLF and Godrej Properties are tracing out multiple bullish structures, implying a rally of about 10%. Our customised housing finance companies index has given a bullish breakout. L&T Finance and LIC Housing Finance have confirmed multiple bullish structures within the basket, implying an 8-10% upside in the medium term.