Nifty having taken support at 19329, the recent reaction low on Friday, a buy on dips mode is in play, which augurs well for Muhurat day and for those worrying about a dip on the next day, he says. Edited excerpts from a chat:
Nifty showed resistance around 19,460 level in the week and consolidated in the last 2 trading sessions. What would be your strategy on Muhurat trading day? Many traders do token buying on the occasion and as a result Sensex mostly ends in the green but due to profit booking the next day it falls.
Muhurat trading is a special session arranged for the occasion, and it is normal for excesses to be skimmed off as regular trading resumes the next day. However, those participating in the session on an auspicious note do not look at intraday or overnight gains. Incidentally, we have also seen Muhurat trading days seeing dips and that has not prevented stocks from gaining through the Samvat. Also, this being a stock specific exercise, Nifty’s trend takes less of a predominance as it does on regular days. That said, Nifty having taken support at 19329, the recent reaction low on Friday, a buy on dips mode is in play, which augurs well for Muhurat day and for those worrying about a dip on the next day. Going forward, we expect 19170 to hold in the event of extended dips, with intermediate support at 10-SMA of 19262, while an outright rise above 19433 could also signal that we are back on to the 19840 trajectory.
Nifty Bank outperformed Nifty. What should be the best strategy for Nifty Bank option traders in the week ahead?
The standard deviation profile of Nifty Bank positions it better than Nifty to stage a measured push towards the 50-DMA at 44239. With this in perspective, we favour a bull spread strategy with calls, using 43700CE for the long leg and 44000CE for short leg, with a net debit of 165 points at available prices now on 15Nov contract. Exit may be considered on approach to 44300. 43700 or 43350 may be used as a downside marker on the index.
Give us your top Muhurat trading day picks
Sansera Engineering (CMP: 855)
View : Buy
Targets : 960, 1028, 1100
Stop loss : 769
Since its debut in 2022, the stock has been moving within a triangle pattern in monthly time frames. A breakout that happened in June 2023 has seen a pull back and now is back at the triangle pattern support in the monthly time frame. It has retraced Fibonacci 61.8% from the April 2023 low and June 2023 high, adding strength to the expected bounce back.
We expect the stock to move towards 960, 1028 and 1100 in the next 1 year. Longs may be protected with stoploss placed below 770 on closing basis.
Sagar Cements (CMP: 260)
View : Buy
Targets : 295, 320, 360
Stoploss : 215
The bounce back that started in June 2020 added a new high in Sep 2021. Since then, a Pennant pattern has been in the making in the monthly time frame which seems to have matured signaling a breakout soon. A MACD signal break in the monthly time frame is also reinforcing the bullish outlook in the medium term.
We expect the stock to move towards 295, 300 and 360 in the next 1 year. All longs may be protected with stoploss placed below 215 on a closing basis.
IOL Chemicals (CMP: 430)
View : Buy
Targets : 510, 560, 640
Stoploss : 375
The stock has been moving within a rising trend channel since 2014 and continues to honour the boundaries. It has bounced off the channel support in the monthly charts recently and is gearing up for a possible upside towards the channel resistance. Supporting this setup is the MACD which has broken above the signal line in monthly periodicity.
We expect the stock to move towards 510, 580 and 640 in the next 1 year. All longs may be protected with stoploss placed below 375 on a closing basis.
GRANULES (CMP: 366)
View : Buy
Targets : 400, 430, 460
Stoploss : 310
After witnessing continuous upside since Sep 2019, the stock has been consolidating and moving within a falling wedge pattern since Oct 2020. It has now formed a flag pattern in the monthly time frame and is closer to a breakout. Also, the MACD has broken above the signal line in the monthly time frame painting a bullish outlook for the stock.
We expect the stock to move towards 400, 430 and 460 in the next 1 year. All longs may be protected with stoploss placed below 310 on a closing basis.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)