What are you making of the week that we have had? This entire week we have really just been seeing a record of continuation for both the Nifty as well as the Sensex.
Rajesh Palviya: So, we have seen a very strong run up for the September series and the way the market has moved up in the last couple of weeks, that clearly shows that the sectorial rotation which we have witnessed in last couple of weeks that clearly gives us confidence that this rally can extend further. As the underperforming sectors have now started showing buying interest and short covering is visible in the derivative data also, so we believe that this momentum can extend further. Looking at the rollover data also, Nifty has shown almost 78% kind of rollover, it is higher than compared to the last three months, six months average.
Even the Nifty has added almost 30 lakh shares for this fresh series. So, both indices have witnessed a long built up setup series on series and looking at the data, we believe that this momentum can extend further. For Nifty, we are projecting a target towards 26,500 to 26,600 going forward in the continuation of this up move. On the downside, the major support is placed at around 25,900, 25,800 zone. So, for this new series, we believe that 25,800 to 26,500, 26,600 would be the range and the buy on dip should be your strategy.
For trading point of view, 26,050 should be your stop loss to go long in any kind of dip if you get in the market and a possible target towards 26,350 to 26,400 one can keep as a target for trading point of view. For Bank Nifty also, till Bank Nifty is holding above 53,500, I think one should use any minor dip as a buying opportunity. On the high side, once Bank Nifty manages to cross above 54,200, 54,300, this rally can extend to 54,800 to 55,000 levels also. So, both indices are looking bullish. Buying on dip should be your strategy.
All the factors put together, of course, this looks like a festive, cheerful month coming ahead. If you talk about the October seasonality at play, of course, 8 out of the 10 times Nifty has been closed with gains. Bank Nifty closed 9 out of 10 times. Gush of liquidity coming in from FIIs. DIIs were already present. Now the Nifty’s September rollover is also not that bad, nearly 80%. What could be the broad range of Nifty as well as Bank Nifty that you can suggest to our viewers?
Rajesh Palviya: This is the fourth consecutive series where we are seeing Nifty has registered a positive close and looking at the overall structure, we believe that bullishness is likely to be there as most of the sectors have shown good rollover activity and underperforming sectors like IT, FMCG and metal, all these sectors have also started participating. We have seen good traction in the energy basket as well as in oil marketing companies also.
So, I think this momentum can extend. For Nifty, we are projecting a range of 25,800 to 26,600 for the next couple of weeks and we believe that bias would remain on the bullish side only. And for Bank Nifty, the range which we are playing for the October series is 53,300 on the downside and on the high side, 55,000 is the projected target for Bank Nifty on the high side.So, I think the broad market looks like on a bullish side only, so our strategy, as we mentioned, like buy on dips should be your strategy. And the sector where we feel that some more momentum can extend, automobile, pharma, these two sectors are clearly looking bullish and one can look at the capital goods sector also, that sector is also looking bullish and we believe that short covering action may trigger in these stocks from the capital goods and here also we could see good momentum in the October series.
Tell us now because relatively the kind of gains which have come in from auto or energy or even from metal space, they have charged up because of some reasons. Now, with the banks having relatively underperformed, they have not performed much and in fact, surprisingly this week if you talk about largecaps have performed better over midcap and smallcap. Now, is there a case to look at stocks like HDFC Bank because they are FII favourite counters. Now, brokerage notes are coming on at HDFC Bank, ICICI Bank. What do you think of banking stocks moving ahead this coming week or from here on?
Rajesh Palviya: We have seen a very concentrated rally in banking stocks. Some of the private banks have done well in the last couple of weeks. So, from the private banking space, I think ICICI Bank is looking more promising compared to all other banks.
Any minor dip should be used as a buying opportunity in ICICI Bank. Though HDFC Bank has also recovered from its recent low and now stock is holding about 1740 level. So, from a near term to short term perspective, I think if it continues to trade above 1740 level, yes, here also we could see some buying traction and possible upward momentum can extend to 1800 to 1820 kind of level, that is the next supply zone for the HDFC Bank also.
So, 1740 is our immediate stop loss to buy and accumulate HDFC Bank also. But from a private sector bank, I think ICICI Bank would be our first choice to buy because in banking what has happened? PSU banks have not much participated in this up move.
SBI, Canara Bank, all these banks are still consolidating. But from PSU Bank, one outperforming stock that we like is Bank of Baroda, here also we can see some traction. So, some of the stocks are looking promising on the technical front and these stocks can be looked at from the banking pack.
Tell us your specific recommendation here. Now that earnings season is also kicking off, the US has started, Accenture gave its numbers, IT is in full focus now. What are the two trades that you would want to recommend here to our viewers?
Rajesh Palviya: So, the first one is Coal India. Stock has taken the support around 480 zone and in this recovery, now again stock moving back above 20-day, 50-day moving average, looking at the reversal from the lower level. We believe that Coal India may extend its gain. I think a possible target towards 535 we can see, stop loss should be placed at around 506.
And the second stock is from the capital goods space, that is Siemens. Stock has moved up in the last couple of weeks above 7300 level, so I think if it sustains above 7300 level, there should be further follow-up buying action in this stock.
The way the stock managed to break out of last three-week consolidation, we believe that Siemens may extend its gain, possible target towards 7550 we can see. One can buy with a stop loss of 7200.
And third one is Gail, Gas Authority, whose stock has also moved up quite well in the last couple of days and now stock is negotiating with its previous swing highs.
So, the way stock has moved up, we believe that here we can see furthermore continuity of uptrend, 248 is the next target, keep your stop loss around 230 to buy gail also.