Chartist Talks: Sudeep Shah of SBI Securities explains why he is bullish on these 5 stocks

Sudeep Shah is the the Head of Technical and Derivative Research at SBI Securities

According to Sudeep Shah of SBI Securities, Life Insurance Corporation (LIC) and Polycab India have demonstrated strong bullish momentum accompanied by relatively higher volumes over the last week. Additionally, momentum indicators and oscillators are signaling continued bullish strength, he said.

Furthermore, he is bullish on HUDCO and PB Fintech. "HUDCO has given a horizontal trendline breakout along with the robust volume and also, it has surged above its short and long-term moving averages, while in case of PB Fintech, momentum indicators and oscillators are suggesting strong bullish momentum in the stock,' he reasoned.

On the sectors front, "PSU banks, private banks, IT, and realty sectors are likely to outperform in the short term, driven by strong chart structures and favourable momentum indicators. These sectors exhibit potential for sustained bullish momentum," said the Head of Technical and Derivative Research at SBI Securities with over 17 years of experience.

Yes, once Nifty sustains above 24,400, we expect Nifty to move towards 25,000 during the December series, but not in the first week of December. The seasonality trend also suggests that December is historically a favourable month for the bulls. Over the past 18 years, the benchmark index Nifty has recorded positive performance on 12 occasions.

Analyzing the weekly and monthly charts, the index has formed a candle with a long lower shadow, indicating strong buying interest at lower levels. On Friday, the index found support near the 50% Fibonacci retracement level of its recent upmove, which began from the low of 23,263 to the high of 24,354. Following this, it witnessed a sharp rebound. Currently, the index is trading above its 20-day EMA (Exponential Moving Average), and the daily RSI (Relative Strength Index) is positioned above its 9-day average, reinforcing an overall bullish trend in the short term.

Furthermore, the rollover for Nifty Index futures rose significantly to 79.34 percent, surpassing last month's 72.87 percent and the three-month average of 76.99 percent, indicating strong trader confidence in the continuation of the bullish trend.

These technical and derivative factors indicate an overall bullish sentiment in the short term. Talking about levels, the zone of 24,350-24,400 will act as an immediate hurdle of the index as it is the confluence of 50 and 100-day EMA levels. Any sustainable move above the level of 24,400 will lead to sharp upside rally upto the level of 24,700, followed by 25,000 in the short term. On the downside, the zone of 23,900-23,850 will serve as crucial support. Any sustainable move below 23,850 will lead to deeper correction in the index, and in that case, it is likely to test the 23,550 level in the short term.

The Bankex has been relatively outperforming the frontline indices. However, the daily and weekly charts show mixed signals, as the index has been consolidating in the range of 56,650-60,069 over the past 39 trading sessions, creating a noisy pattern without clear direction.

On the other hand, the higher timeframe, i.e., monthly chart offer more clarity. Notably, over the last four months, the index has consistently taken support in the 56,600-56,700 zone, followed by sharp rebounds. This has led to the formation of candles with long lower shadows on the monthly scale, clearly signaling persistent buying interest at these levels.

If the index sustains above the 60,000 mark with follow-through buying, it could set the stage for a move toward its all-time high in the December series.

Is it better to buy LIC and Polycab India?

Yes, both stocks have demonstrated strong bullish momentum accompanied by relatively higher volumes over the last week. From a technical perspective, both LIC and Polycab India are trading above their short and long-term moving averages, which are in a rising trajectory and aligned in the desired sequence. Additionally, momentum indicators and oscillators are signaling continued bullish strength.

Therefore, we recommend accumulating both stocks at current levels, keeping a medium to a long-term perspective.

Are the Ramco Cements charts and technical indicators signaling a strong buy?

Yes, the stock has recently broken out of a consolidation phase, followed by a sharp upside rally supported by robust volumes. Currently trading at a 10-month high, Ramco Cements is displaying strong bullish momentum, as confirmed by its technical indicators.

All moving averages are aligned in a bullish trajectory, and momentum-based indicators reinforce this positive outlook. The daily and weekly RSI are positioned in the super bullish zone, signaling sustained buying strength. Additionally, the MACD (Moving Average Convergence Divergence) histogram on both daily and weekly charts points to a pickup in upside momentum.

Moreover, the trend strength indicator, ADX (Average Directional Index), is quoting above the 39 level and continues to rise, underscoring the robustness of the current uptrend. These factors collectively suggest that Ramco Cements is a strong buy at current levels. We believe the stock is likely to continue its northward journey and test the level of Rs 1,060, followed by Rs 1,100 in the short term.

HUDCO

The stock has given a horizontal trendline breakout along with the robust volume. Also, it has surged above its short and long-term moving averages. Most noteworthy, the daily RSI surged above 60 mark for the first time after July 2024. Hence, we believe the stock is likely to continue its northward journey and test the level of Rs 255, followed by Rs 260 in the short term. On the downside, the zone of Rs 225-224 is likely to provide the cushion in case of any immediate decline.

PB Fintech

The stock has been relatively outperforming the frontline indices for the last couple of months. It has formed a strong base near the 100-day EMA level and thereafter witnessed a smart rebound. The reversal from the support zone is confirmed by relatively higher volume. The momentum indicators and oscillators are also suggesting strong bullish momentum in the stock. Hence, we recommend accumulating the stock in the zone of Rs 1,900-1,880 level with a stop-loss of Rs 1,820. On the upside, it is likely to test the level of Rs 2,000, followed by Rs 2,050 in the short term.

Technically, PSU banks, private banks, IT, and realty sectors are likely to outperform in the short term, driven by strong chart structures and favourable momentum indicators. These sectors exhibit potential for sustained bullish momentum, making them ideal for focused investment during the December series.