Chartist Talks: Sudeep Shah of SBI Securities explains why he is bullish on these 2 stocks for next week

No, we don’t see any possibility of a breakdown in Eicher Motors as the major trend of the stock is bullish. Also, it is strongly outperforming Nifty and Nifty Auto. Most noteworthy, the technical indicators are portraying a bullish picture.

Going ahead, any sustainable move above the level of Rs 5,020 will lead to downward sloping trendline breakout in the stock. In that case, it is likely to witness a sharp upside rally upto the level of Rs 5,200 in the short term.

Do you see the relentless selling pressure continuing in Hindustan Unilever as it is already down more than 600 rupees from record high levels?

Yes, the stock is in a strong downtrend, trading below both short-term and long-term moving averages on the daily chart. It's currently 8 percent below its 200-day EMA (Exponential Moving Average), signaling increased bearish momentum. The daily RSI (Relative Strength Index) is in the deeply bearish zone, according to RSI range shift rules. Notably, the weekly RSI has dropped below 40 for the first time since April 2024.

Therefore, the stock is likely to continue its downward move and could test the Rs 2,200 level in the short term. On the upside, the Rs 2,450-2,460 zone will act as a key resistance for the stock.

Will the Bank Nifty manage to hold 50-week EMA in the November series?

Last week, the banking benchmark index Bank Nifty has given a 5-week consolidation breakdown. In addition, it has formed a sizeable bearish candle on a breakdown week, which adds more bearishness. This breakdown indicates a deepening bearish trend, suggesting further downside pressure in the near term.

Among the constituents of the index, all constituent stocks are trading below their 20-day EMA, over 90 percent are below their 50-day EMA, and more than 75 percent are below their 100-day EMA, highlighting widespread weakness across the sector.

The index is currently hovering around its crucial 200-day EMA support level, making the next 2-3 trading sessions pivotal for determining its near-term direction.

Talking about crucial levels, the zone of 49,500-49,400 will act as immediate support for the index as prior swing low is placed in that region. Any sustainable move below the level of 49,400 will lead to further correction in the index. In that case, the index is likely to test the level of 48,800, followed by 48,300 in the short term. On the upside, the zone of 50,700-50,800 will act as an immediate hurdle for the index.

Your top 2 bets for next week?

Indian Hotels Company | CMP: Rs 741

The stock has strongly been outperforming the frontline indices since the last couple of trading sessions. The Mansfield’s Relative Strength is quoting above zero line since last 77 trading sessions, which suggest sustained outperformance. As the stock is trading near 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 745-735 with a stop-loss of Rs 715 level. On the upside, it is likely to test the level of Rs 780, followed by Rs 800 in the short term.

Zomato | CMP: Rs 270

The stock has formed a strong base near its 100-day EMA level and witnessed a smart rebound. The reversal from the support zone is confirmed by robust volume. Further, it has surged above its 20 and 50-day EMA level. These averages are started edging higher, which is a bullish sign. Further, the daily RSI is about to cross 60 mark. Hence, we recommend accumulating the stock in the zone of Rs 270-268 with a stop-loss of Rs 260 level. On the upside, it is likely to test the level of Rs 282, followed by Rs 290 in the short term.

Will the downtrend continue in NTPC that hit 200-day EMA this week?

Yes, from the all-time high level, the stock has tumbled by over 17 percent in just 32 trading sessions. This fall has brought NTPC close to its 200-day EMA, a level that has held since July 2022. The momentum indicators and oscillators also suggest bearish momentum in the stock.

Going ahead, any sustainable move below the level of Rs 370 will lead to further selling pressure in the stock. In that case, it is likely to test the level of Rs 356 in the short term.

Are you cautious on the market? Is the BSE Sensex looking oversold now?

The Sensex is currently trading near its 200-day EMA level. The momentum indicators and oscillators also suggest strong bearish momentum in the index. Hence, any sustainable move below the 200-day EMA zone of 77,400-77,300 will lead to sharp correction in the index. In that case, it is likely to test the level of 76,300, which is 61.8 percent Fibonacci retracement level of its prior upward rally started from the election result day’s low of 70,234 to all-time high level of 85,978. On the upside, the zone of 78,500-78,600 will act as an immediate hurdle.

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