Sudeep Shah of SBI Securities sees significant rally in Federal Bank after reading charts. "The stock is trading above its short and long-term moving averages. These averages are in rising mode and they are in desired sequence, which suggests trend is strong," he reasoned.
He is also bullish on One 97 Communications (Paytm). According to him, the ratio chart of Paytm as compared to Nifty is marking the higher tops and higher bottoms since last six month, which shows sustained outperformance. "All the momentum-based indicators and oscillators are suggesting strong bullish momentum in the stock. The daily and weekly RSI is in super bullish zone as per RSI range shift rules," said Shah, who is the Head of Technical and Derivative Research at SBI Securities with over 17 years of experience.
Do you see a strong chance of Nifty 50 falling below 23,500 once before getting into a strong upward rally?
This week, the benchmark index Nifty found support near its previous swing low zone of 23,800–23,900, sparking a rebound as traders reacted positively to Donald Trump’s presidential victory. However, despite the recovery, the index struggled to break above its 20-day EMA (Exponential Moving Average) zone of 24,500-24,550, encountering renewed selling pressure on Thursday and Friday.
This price action led to the formation of a High Wave candle on the weekly chart, signalling clear indecisiveness among market participants and suggesting that traders are uncertain about the market's next direction. The momentum indicators are also portraying a similar picture. The daily RSI (Relative Strength Index) has been oscillating in a narrow range for the last five trading sessions. Further, the trend strength indicator, ADX has remained flat over the last four sessions.
These technical factors suggest that the market will likely experience consolidation over the next few trading sessions. Talking about the crucial levels, the zone of 23,850-23,800 will act as immediate support for the index. If the index slips below the level of 23,800, then the 200-day EMA will act as the next important support for the index, which is currently placed at the 23,532 level.
While, on the upside, the zone of 24,500-24,550 will act as a crucial hurdle for the index. Any sustainable move above the level of 24,550 will lead to a sharp upside rally in the index upto the level of 24,900 in the short-term.
What is your take on the Bank Nifty which again dropped below 20-and-50 EMAs? Is it likely to remain in the consolidation zone for the entire November?
Since the last 23 trading sessions, the banking benchmark index Bank Nifty has been oscillating in the zone of 50,382-52,577 levels. In the last week, the index has formed a High Wave like a candle on a weekly scale, which indicates indecisiveness among the market participants.
Due to the consolidation, the short-term moving averages have started losing their curvy nature. Further, the daily RSI has been in the sideways zone since the last 22 trading sessions as per RSI range shift rules. These technical signals suggest that Bank Nifty may continue to consolidate until a decisive breakout occurs in either direction.
Talking about crucial levels, the zone of 52,500-52,600 will act as an immediate hurdle for the index. Any sustainable move above the level of 52,600 will lead to a sharp upside rally in the index. In that case, the index is likely to test the level of 53,200 in the short-term.
On the downside, the zone of 50,900-50,800 will act as crucial support for the index. Any sustainable move below the level of 50,800 will lead to resume its downward journey. In that case, the zone of 50,300-50,200 will act as the next important support for the index.
Do you see a significant rally in Federal Bank after reading charts?
Yes, the stock has strongly been outperforming the frontline indices in the last couple of weeks. The ratio chart of the stock has compared to the Nifty is at 62-month high. Also, the stock relatively outshines Bank Nifty with a decent margin.
Currently, it is trading above its short and long-term moving averages. These averages are in rising mode and they are in desired sequence, which suggests trend is strong. Hence, we believe, it is likely to continue its outperformance in the short-term and test the level of Rs 215, followed by 225 in the short-term. On the downside, the zone of Rs 200-198 is likely to provide the cushion in case of any immediate decline.
Are the charts convinced you that Paytm is a strong buy now?
Yes, it is also strongly outperforming the frontline indices since last couple of months. The ratio chart of stock as compared to Nifty is marking the higher tops and higher bottoms since last six month. This shows sustained outperformance. All the momentum-based indicators and oscillators are suggesting strong bullish momentum in the stock. The daily and weekly RSI is in super bullish zone as per RSI range shift rules. The daily and weekly MACD stays bullish as it is quoting above its zero line and signal line. The MACD histogram is suggesting pickup in upside momentum.
Hence, these technical factors are aligned in favour of bulls. Hence, we recommend staying with the bullish bias for the short-term. Talking about crucial level, the zone of Rs 790-780 is likely to act as immediate support for the index. On the upside, it is likely to test the level of Rs 900, followed by Rs 950 in the medium-term.
Your take on Page Industries?
On Friday, the stock has given a stage-2 cup pattern breakout on a daily scale. This breakout is confirmed by robust volume. In addition, the stock has formed a sizeable bullish candle on breakout day, which adds strength to the breakout. Currently the stock is trading above its short and long-term moving averages, which is a bullish sign. These averages are in rising mode and they are in desired sequence, which suggest trend is strong.
The momentum indicators and oscillators are also supporting the overall bullish chart structure. Hence, we recommend staying with the bullish bias. Talking about crucial level, the zone of Rs 46,900-46,800 will act as immediate support for the index.
As per the measure rule of Cup pattern, the upside target is placed at Rs 51,310 in the medium-term.
Do you see the possibility of correction in the Nifty Pharma index?
Yes, since last 12-trading sessions, the index is witnessing counter trend consolidation and it is forming a Bearish Flag like pattern. Also, it is trading below its short-term moving averages, i.e. 20 and 50-day EMA level, which is a bearish sign. The daily RSI is about to slip below its 40 mark and it is in a falling mode.
Talking about crucial levels, the zone of 22,300-22,200 will act as immediate support for the index as lower trendline of the Flag pattern is placed in that region. Any sustainable move below the level of 22,200 will lead to sharp correction in the index.
Your top 2 bets for next week?
The stock has given a downward sloping trendline breakout on a daily scale. This breakout is confirmed by robust volume. As the stock is trading at all-time high levels, all the moving averages and momentum-based indicators are suggesting strong bullish momentum in the stock. Hence, we recommend accumulating the stock in the zone of Rs 725-735 level with a stop-loss of Rs 705. On the upside, it is likely to test the level of Rs 770, followed by Rs 790 in the short-term.
The Nifty IT is strongly outperforming the frontline indices since last couple of trading sessions. Coforge is currently trading at all-time high level. The daily RSI of the stock is in super bullish zone as per RSI range shift rules. Hence, we recommend accumulating the stock in the zone of Rs 7,960-7,920 level with the stop-loss of Rs 7,700. On the upside, it is likely to test the level of Rs 8,300, followed by 8,500 in the short-term.
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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
