The Nifty broke the three-day winning streak on September 18 on the back of weak global cues. At close, the index was down 59 points at 20,133. Global equities fell on Monday as growth concerns tested investors' nerves ahead of a week packed with central bank meetings in five countries. Traders took some cash off the table ahead of the policy decisions that will reveal how major central banks view progress in the fight against inflation.
For the Nifty, primary and intermediate trend remains positive as it has been holding above the 50, 100 and 200-day EMA (exponential moving average). On the weekly chart, the 14-week RSI (relative strength index) is at 71.64, which again suggests it is not extremely overbought and there is scope for more upsides in intermediate term.
On the derivatives side, we have seen aggressive Put writing at 19,800-20,000 levels, which coincides with the 11 and 20-day moving averages placed at 19,918 and 19,771. Therefore, on the downside, 19,770-20,000 could now be considered as an immediate support for the Nifty.
While we do not rule out the possibility of a running correction in the next few days, we believe that the Nifty could move towards intermediate upside targets of 20,600. This target is the 38.2 percent Fibonacci extension of the recent up-move from the lows of March 2023 to the highs of July 2023. Therefore, traders are advised to accumulate longs on decline with a stop-loss at 19,770 on the Nifty on a closing basis.
Broad market indices like Nifty Midcap and Smallcap indices have underperformed the Nifty during the last week. We believe that they may continue to underperform for the coming few weeks before they resume their uptrend. In terms of strategy, we recommend having a bias towards Largecaps.
Here are three buy calls for the next 3-4 weeks:
AMI Organics: Buy | LTP: Rs 1,302 | Stop-Loss: Rs 1,220 | Targets: Rs 1,393-1,460 | Return: 12 percent
The stock price has broken out on the monthly chart by surpassing the multiple top resistance of Rs 1,270 odd levels. Momentum Oscillators like - RSI (11) and MFI (money flow index 10) are sloping upwards and placed above 50 on the weekly chart, indicating strength in the current uptrend of the stock.
The stock price is likely to surge once it manages to surpass previous swing high of Rs 1,368 levels.
GSFC: Buy | LTP: Rs 172 | Stop-Loss: Rs 160 | Targets: Rs 186-195 | Return: 13 percent
After broken out on the monthly chart, Gujarat State Fertilizers & Chemicals (GSFC) price has witnessed running correction which we believe is a buying opportunity.
Primary trend of the stock remains positive as stock price is placed above its 100 and 200-day EMA. Fertilizer stocks looking strong on the short to medium term chart.
Axis Bank: Buy | LTP: Rs 1,025 | Stop-Loss: Rs 970 | Targets: Rs 1,085-1,130 | Return: 10 percent
The stock price has broken out on the weekly chart to close at all-time high levels. Primary trend of the stock remains positive as stock price is trading above its 100 and 200-day EMA.
The stock price has been forming bullish higher top higher bottom formation on the weekly chart.
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