Nilesh Jain, the Head – Technical and Derivatives Research Analyst (Equity Research) at Centrum Broking, who expects the Nifty to register a new record high in the near term, with the potential to extend its gains towards 28,500 levels in the upcoming Samvat year, is betting on these four stocks for Muhurat trading on October 21.
He believes these four stocks - Tata Consumer Products, Adani Ports, Bharat Electronics, and Bajaj Auto - can generate alpha in Samvat 2082.
According to him, the broader structure remains constructive for the Bank Nifty. He expects the banking index to potentially surpass the 60,000 mark in the upcoming Samvat year. The index broke out from an inverse Head and Shoulders pattern near 56,000 levels, which now acts as a crucial support zone, he said in an interview to Moneycontrol.
How would you summarize the performance of Samvat 2081, and what is your trading strategy for Muhurat trading?
Samvat 2081 turned out to be a mixed bag for the markets. While the Nifty index underwent a time-wise correction, the Bank Nifty showed relative outperformance. Earnings disappointments in the IT and FMCG sectors, coupled with persistent FII selling, weighed on overall market sentiment during the year.
However, it now appears that the worst is behind, and equities are poised to outperform other asset classes in the upcoming Samvat. For Muhurat trading, the strategy would be to focus on quality large-cap stocks, particularly within sectors such as Auto, Banking, Capital Goods, and Realty, which are expected to lead the next leg of the market rally.
From a technical perspective, considering the long-term charts, do you believe Samvat 2082 will be strong for Nifty 50? Do you see the index reaching new record highs and surpassing 28,000 in the upcoming Samvat?
The market appears to have completed its consolidation phase, and thanks to a late recovery, it managed to deliver single-digit positive returns for this Samvat 2081. The Nifty has formed a strong base and continues to hold above its long-term 200-DMA, currently placed near 24,230 levels. On the broader time frame, the long-term structure remains firmly positive, with the Nifty maintaining a higher top and higher bottom formation since the post-2020 correction.
Moreover, the FII long-to-short ratio is currently at multi-month lows, indicating a high probability of short covering, which could act as a catalyst for further upside. We expect the Nifty to register a new record high in the near term, with the potential to extend its gains towards 28,500 levels in the upcoming Samvat year.
What are your top 4 technical picks for Muhurat trading that have the potential to generate alpha in Samvat 2082?
The stock gave a breakout from a triangle pattern on the daily chart. It is trading well above all its short-term and long-term moving averages, indicating strong bullish momentum. The recent price action, supported by higher-than-average volumes, further strengthens the positive outlook. Based on this setup, the stock is expected to move towards new record highs near Rs 500, with strong support placed at Rs 369.
The stock has formed a solid base and moved above its key short- term and long-term moving averages. It has strong support at the long-term 200-DMA, placed near Rs 8,250. Earlier, a golden crossover occurred as the 50-DMA crossed above the 200-DMA, indicating the potential start of a bullish trend. Momentum indicators and oscillators have given a buy crossover on both the daily and weekly charts, confirming positive momentum. Based on this setup, the stock is expected to move towards the Rs 11,000 level, with strong support at Rs 8,250.
Adani Ports and Special Economic Zone
The stock recently found support near its 50-DMA placed around Rs 1,375 and witnessed a sharp rebound. With the recent surge in momentum accompanied by higher volumes, the stock is now on the verge of a major breakout from a falling trend line connecting the previous major tops. A decisive move above this resistance would confirm a short-term bottom formation and open the upside potential towards Rs 1,650.
On the downside, immediate support is placed near Rs 1,391, which is expected to act as a cushion against minor pullbacks. On the derivatives front, a healthy build-up of long positions further reinforces the bullish sentiment. Based on the above rationale, we expect the stock to break out above the resistance and move towards Rs 1,650 level.
The stock has given a breakout from a symmetrical triangle pattern on the weekly chart, indicating the resumption of an upward trend. It has also formed a strong base near Rs 1,050 levels and is now developing a higher top and higher bottom formation on the daily chart, reinforcing the positive structure.
Based on the pattern breakout, the stock offers an upside potential towards Rs 1,300, with immediate support placed at Rs 1,095. It can be accumulated as a positional bet, maintaining a stop loss near the support zone.
Bank Nifty hit a new record high at the start of Diwali. Do you expect the banking index to outperform Nifty 50 and reach the 60,000 mark in the upcoming Samvat?
The Bank Nifty index outperformed the Nifty index during the previous Samvat year, scaling to new record highs. The journey, however, was marked by bouts of volatility, during which the Bank Nifty/Nifty ratio dipped to 2.10 levels before regaining momentum. The ratio has now recovered to around 2.25, and there remains further room for upside towards 2.45 levels, indicating continued relative strength in the banking space.
Recently, the index broke out from an inverse Head and Shoulders pattern near 56,000 levels, which now acts as a crucial support zone. The broader structure remains constructive, and we expect Bank Nifty to potentially surpass the 60,000 mark in the upcoming Samvat year.
Which two sectors look technically strong as we move into Samvat 2082?
The Nifty Auto index has shown robust momentum over the past few months, surging to a new record high. After spending nearly a year in consolidation, the index now appears well-positioned for a strong upward move. We expect the Auto index to rally towards the 30,000 mark, with immediate support placed at 25,600 levels.
The Nifty Realty index is showing early signs of bottoming out, though a decisive confirmation is still awaited. Following a prolonged phase of underperformance, the Realty space could potentially emerge as a dark horse in the coming months. The index has built a strong base near 850, and a break above 950 would confirm a trend reversal, paving the way for an upside towards 1,050 levels.
Do you believe Bharti Airtel will continue to be a star performer in Samvat 2082?
Bharti Airtel continues to remain in a secular uptrend, consistently respecting a rising trend line that connects all the major lows. The stock has scaled to new record highs, confirming a fresh breakout on the charts. It is trading well above all its short-term and long-term moving averages, reflecting strong underlying momentum.
From a positional perspective, the stock offers an upside target of Rs 2,551, while the 200-DMA placed near Rs 1,800 serves as a crucial long-term support zone. Bharti Airtel remains our preferred pick within the telecom space, and it can be accumulated in a staggered manner for portfolio positioning.
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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