Edited excerpts:
The earnings season seems to be having a negative impact on both banks and IT stocks. In this situation, do you think Nifty may break below the support around 19,500-level?
The Indian market has experienced volatility due to quarterly earnings, and recently, selling pressure has been observed in IT and banking stocks. The benchmark Nifty recently experienced a significant decline, falling below the 50-day moving average (50DMA). The current trend appears to be negative, with immediate support situated at 19,500. A further decline below this level could potentially lead the index towards the range of 19,150 to 19,000.
On the upside, the zone between 19,600 and 19,650 is expected to act as a strong resistance. A move above 19,650 could trigger short covering in the market.
Nifty PSU Bank is turning out to be the worst performing sectoral index after the recent rally. Do you think the party is over?
After a remarkable rally in the PSU (Public Sector Undertaking) sector, stocks in the PSU Bank sector have witnessed substantial selling due to profit-taking. The sentiment in PSU banks is expected to remain bearish as long as the index closes below 5,050. In contrast, the Bank Nifty is currently consolidating around 43,700 following a sharp decline in recent times.
On the downside, 43,300 is expected to serve as a critical support level, while on the upside, 44,200 is likely to act as a significant resistance level.
Auto stocks have been able to outperform in a weak market amid hopes of festive sales. What are the charts telling you?
Auto stocks have recently experienced a substantial rally, propelling the index to its all-time high. On the daily chart, the index has surged above a crucial moving average. The Relative Strength Index (RSI) indicates the potential for the current positive momentum to continue.
In the short term, it appears that a strong momentum and a robust trend are likely to persist in this sector.
FACT rallied 30% in the week. ITI also went up further. Do you see signs of overbought levels?
Both stocks have experienced a remarkable rally in recent times, leading to profit-taking at higher levels. In fact, ITI and FACT have declined by 13% and 8%, respectively, from their recent highs, which also happened to be their all-time highs. We anticipate that the consolidation phase may persist for a few more days. Traders might want to consider entering these stocks during minor dips in the market.
Give us your top trading ideas for the week:
- Sell BHEL at Rs 125-126. Target price Rs 117/115. Stop loss: Rs 130
The stock has broken below the consolidation range on the daily chart, indicating a growing sense of pessimism among investors. Furthermore, the stock has dipped below a critical moving average, and the RSI indicator has entered into a bearish crossover.
In the short term, it’s likely that the stock could decline to the range of 117-115. Resistance levels on the higher end are observable at 130.
- Buy IndusInd Bank at Rs 1455-1470. Target price Rs 1525. Stop loss: Rs 1430
IndusInd Bank shows strong potential for a breakout, with both daily and weekly charts indicating upward momentum. The stock rebounded from a support level with high trading volume and closed above a critical moving average. Additionally, RSI suggests increasing momentum. A strategic buy range is 1455-1470, with a stop loss at 1430 and a target of 1525.
- Buy Kotak Bank at Rs 1770. Target price Rs 1820/1860. Stop loss: Rs 1740
Kotak Bank has recently undergone a base formation on the daily chart. This pattern is characterized by the presence of strong buying activity, confirming a bullish undertone in the stock. The momentum indicator RSI is displaying positive divergence, which serves as an early indicator of a potential trend reversal to the upside. This suggests that the stock may be poised for a bullish move. The stock has a visible support level at 1700, which is acting as a cushion for the bulls. This support level is crucial for maintaining the bullish sentiment. Given the strong buying, positive RSI divergence, and the support at 1740, the stock has the potential to reach upside targets of 1820 and 1860.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)