Charist Talks: Osho Krishan believes Nifty Auto to remain in uncharted territory, bullish on Balkrishna Industries

The last session had been a roller coaster for the market participants, as the whole rosy setup of Nifty registering record highs, ended on a rough note. However, considering the overbought parameters, the Bank Nifty weekly settlement, and the mid-week holiday, such disruptions could be digested.

On the technical front, the Nifty 50 index looks subtle, hovering above its 20 DEMA. Therefore, traders are advised to maintain a positive stance and view dips as potential buying opportunities, instilling a sense of optimism.

The immediate support is placed around the 22,500 mark, followed by 22,400 (20 DEMA). On the contrary, the lifetime high zone around 22,775-22,800 is expected to serve as immediate resistance before the index heads toward the 23,000 mark.

Are the charts of REC and Power Finance Corporation looking strong?

REC has soared to its highest-ever closure, backed by robust volumes. The recent move construes a positive development, and it seems poised to continue its northward march in the comparable period. On level-specific front, Rs 480-475 is likely to be seen as a strong support zone, and any dips are likely to augur well for the buyers. Also, as the counter heads for uncharted territory, it is difficult to trace resistance; hence, trailing stop losses to higher levels till momentum persists is advisable.

PFC has also seen a robust move on the back of strong volumes. Importantly, the counter has spurt from its 21 DEMA (days exponential moving average), signifying a strong risk-reward ratio at the current zone. The bullish gap of Rs 416 is likely to cushion any blip, while the counter seems poised to reclaim its lifetime high of Rs 470. Also, the counter seems buoyant, and a sustained breakout would likely trigger fresh traction from a broader view.

Do you think the higher highs, higher lows formation in the Nifty Auto index seems continuing in coming weeks?

The traction in the majority of the auto and auto ancillary counters adds a bullish quotient to their respective index. The undertone seems buoyant as the index surpassed its previous high to register record highs and seems poised to continue its march in uncharted terrain. On the level-specific front, with the structural breakout, 22,700-22,800 is very much in the vicinity for now before it tests the psychological mark of 23,000.

What is your trading strategy for Nifty Financial Services index?

FINNIFTY has witnessed a strong breakout; however, the follow-up was not very convincing, as it formed a ‘Gravestone Doji’ on the expiry session. The formation at the lifetime high is a concerning factor, and it would be crucial to watch for the intermediate formation of the candlestick on Thursday.

If we manage a closure above 21,900, then we might witness a run towards 22,500 for the upcoming expiry contract. Otherwise, it may fall into a consolidation period, ranging from 21,800-21,000.

Which are the 2 stocks on your bullish radar with couple of weeks perspective?

NHPC has seen strong traction in the last couple of trading sessions as it resurged from its 21 DEMA to witness an ‘Inverted Head & Shoulder’ pattern breakout on the daily chart. Also, on the last session of breakout, a notable increase in volumes was seen, adding to the bullish quotient. On the oscillator front, MACD (moving average convergence divergence) and RSI (relative strength index) both have showcased a positive crossover, suggesting strong momentum in the comparable period. So one can buy NHPC at Rs 95, with a stop-loss at Rs 90 and for targets of Rs 102/105.

Balkrishna Industries started forming a rounding bottom for itself after the fall from Rs 2,790, which indicated the formation of a demand zone. In the last couple of sessions, the counter has been gaining momentum, levitating above its short-term EMAs. The stock is in the process of ‘Cup & Handle’ formation and is likely to gauge momentum in the comparable period. Also, the breakthrough of the signal line in the MACD oscillator showcases an encouraging sign for the counter. One can buy Balkrishna Industries at Rs 2,420, with a stop-loss of Rs 2,330 and target of Rs 2,570-2,580.

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