By Jigar S Patel, Senior Manager - Equity Research at Anand Rathi
The bulls maintained control over Dalal Street throughout the past week, driving the benchmark indices to new all-time highs. The F&O expiry marked the fourth consecutive positive closure, with the Nifty spot index surpassing the significant milestone of 26,000 and even climbing above 26,200. Meanwhile, the BSE Sensex crossed the 85,000 mark.
During the week ended September 27, the Long-Short ratio has risen to nearly 80 percent, which raises some concerns. Additionally, we noted that the monthly RSI (Relative Strength Index) crossed the 80 mark, signaling a potential temporary peak. This outlook remains unchanged as the signal appears on the monthly chart, which typically takes several weeks or even months to fully materialize. Therefore, from a medium-term perspective, we maintain a cautious stance on the market. However, in the short term, we expect further upside in the coming week. The index has been well-supported, and this could propel Nifty towards the 26,500 level. On the downside, immediate support is placed at 26,000, followed by 25,700. We continue to focus on stock-specific strategies and consistently recommend high-conviction trading opportunities through our various products.
On the other hand, Nifty Bank has once again underperformed. While it initially rallied to 54,500 levels, it gave up all its gains during Friday's session, forming a negative candlestick pattern on both the daily and weekly charts. A fresh round of upside is expected only if the index moves above 54,500 in the coming week. On the downside, a close below 53,600 could push the index towards 53,000–52,800, where the 20-day Exponential Moving Average (DEMA) is positioned.
Here are three buy calls for short term:
Bank of Baroda | CMP: Rs 249.6
The nearly three-month-long bearish phase in Bank of Baroda appears to be nearing its end, as a bullish pattern emerges on the daily chart. The stock has formed a triple bottom structure in the Rs 230-Rs 235 zone, a strong reversal signal indicating that the downward trend may be exhausted. Currently, Bank of Baroda is trading around the Rs 250 level, and the triple bottom pattern has developed near the 200-day EMA, adding further appeal to the stock at this point. Additionally, the daily RSI has broken through a bearish trendline along with bull divergence, signaling a shift in momentum towards the bullish side. Given these technical indicators, it is advised to go long on Bank of Baroda in the price range of Rs 248-Rs 250, with an upside target of Rs 270. To manage risk, a stop-loss should be placed near Rs 229, based on a daily closing basis.
Strategy: Buy
Target: Rs 270
Stop-Loss: Rs 229
Canara Bank | CMP: Rs 113.1
A triple bottom structure has formed in the Rs 102-Rs 103 range, which is a strong reversal signal, suggesting that the prolonged downward trend may be losing momentum. Currently, the stock is trading around Rs 113, with this triple bottom pattern developing near the 200-day EMA, enhancing its technical appeal. Furthermore, the daily RSI has broken through a bearish trendline, indicating a shift in momentum towards the upside. Based on these favourable technical signals, it is recommended to consider a long position in Canara Bank within the Rs 112-113 price range, with an expected upside target of Rs 122. A stop-loss should be placed near Rs 107 on a daily closing basis to manage risk effectively.
Strategy: Buy
Target: Rs 122
Stop-Loss: Rs 107
SBI Cards and Payment Services | CMP: Rs 786.3
Following a peak near Rs 933 level, SBI Card underwent a significant downturn, experiencing a sharp decline of approximately 30 percent in its overall value. However, over the course of the week, SBI Card has managed to stabilize around Rs 675 level, forming a sustained support base. Notably, during this period, a bullish ALTERNATE pattern has emerged near Rs 680-710 level, providing further confirmation of positive market sentiment. Additionally, analysis of the Weekly DMI reveals a bull CROSS , indicating a favourable outlook for the stock. Also 3 years long bear trendline is taken out.
Considering these factors alongside chart patterns, investors may find it prudent to consider initiating buy positions within the range of Rs 770-790, with an upside objective targeted at Rs 875. To manage risk, a stop-loss order should be set at Rs 735 on a daily closing basis, providing protection against potential downside movements.
Strategy: Buy
Target: Rs 875
Stop-Loss: Rs 735
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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