By Kunal Shah, Senior Technical & Derivative analyst at LKP Securities
Bulls successfully regained control from bears, pushing Nifty back above the 20,000 mark. On September 13, it closed above this threshold, marking a historic closing high for Nifty. The prevailing sentiment remains optimistic, contingent on Put writers safeguarding the 19,900 levels. A drop below 19,900 could unsettle Put writers, potentially triggering market corrections.
On the upside, the 20,100-20,150 range is poised to act as resistance. A clear breakthrough above 20,150 might propel Nifty into a sustained upward trend.
The bulls took charge and dominated the market, resulting in the formation of a Bullish Engulfing candlestick pattern on the Bank Nifty index. This pattern signifies a potential reversal of the previous bearish sentiment.
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The lower-end support for the index is now established in the range of 45,700-45,600, serving as a strong cushion for the bulls and providing a crucial level of defense against any downward pressure.
Looking ahead, the immediate hurdle on the upside is situated at the 46,000 mark. A successful breach above this level would likely pave the way for further upward momentum, with potential targets at 46,300 and 46,600 levels.
Here are three buy calls for the short term:
NOCIL: Buy | LTP: Rs 249 | Stop-Loss: Rs 235 | Targets: Rs 265-270 | Return: 8 percent
NOCIL has shown significant strength in recent trading sessions. The stock had previously staged a robust breakout from a falling trendline, accompanied by a surge in trading volumes. This breakout signals a reversal of the downtrend.
The momentum indicator RSI (relative strength index) is currently trading above the 60 level, indicating a strong bullish sentiment in the stock.
For potential investors, the lower-end support for NOCIL is at Rs 235, which is expected to act as a strong foundation, providing support to any potential price declines. Looking to the upside, the stock has the potential to reach targets at Rs 265 and Rs 270.
Bank of India: Buy | LTP: Rs 103.55 | Stop-Loss: Rs 90 | Targets: Rs 125-140 | Return: 35 percent
The stock has made a significant breakout on the weekly chart, surpassing the critical resistance level at Rs 102, and this move has been accompanied by robust trading volumes. The stock exhibits a highly bullish sentiment, supported by a pattern of forming higher lows and higher highs on the lower timeframes, signalling a sustained uptrend.
The momentum indicator RSI has surged past the 70 level, indicating robust buying momentum in the stock. In case of a pullback, there is substantial support around the Rs 90 mark, acting as a buffer against potential price declines.
Bank of India presents an enticing prospect for investors, with potential upside targets set at Rs 125 and Rs 140.
Axis Bank: Buy | LTP: Rs 1,014.5 | Stop-Loss: Rs 990 | Targets: Rs 1,040-1,054 | Return: 4 percent
Axis Bank has experienced a breakout from a rectangular pattern on the daily chart, indicating increased optimism in the market. Additionally, the price has consistently remained above the critical moving average, demonstrating the strength of the bullish trend.
Furthermore, the RSI has undergone a bullish crossover. On the lower end, support is situated at Rs 990, while on the higher end, it could potentially move towards Rs 1,054.
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