The markets disappointed everyone who was hoping for an October Fest by ending the month in the red. Bears mauled the benchmark Nifty down almost 800 points from its September close to sneak below the 19,000 mark. Eventually, the index ended the month with a loss of around 2.8 percent. The selling intensified during the second half of the month mainly on the back of negative global cues.
Since the past couple of months, we have been constantly discussing about 200-day EMA (exponential moving average) and finally this time the Nifty50 spot has retested the same placed near the 18,800 mark. During the process, the index has confirmed a breakdown below 19,300 mark and the theoretical target for the breakdown comes around 18,500.
However, the index has turned exactly from the previous major breakout zone of 18,800 and that demand zone coincides with the placement of 200 DEMA. The long-short ratio in index futures by the FIIs reached 10 percent in October 2023. Historically, we have observed that whenever the ratio reached 10 percent or lower, the markets tend to make a strong bottom.
Even during the March 2023 fall, we observed similar data points and then the Nifty reached 20,000. Hence, we remain optimistic for the coming months. On the levels front, 18,850 is an immediate support and a breach of the same might drag the index towards 18,600. On the upside, a close above 19,300 might confirm a bottom and we might be heading towards much higher levels.
For the Nifty Bank index, based on the past 10-years’ data, we were expecting positive momentum during the month. Surprisingly, the index underperformed by losing around 4 percent in October 2023. During the process, it made a low near 42,000 and closed below the 200 DEMA.
However, after the recent recovery it is again trading above 200 DEMA. For the time being, we remain buy on dips for the index with a support of 42,000. The view would be negated below 42,000 and, on the upside, we expect 45,000 or higher levels from here on.
Here are three buy calls for short term:
Tata Teleservices (Maharashtra): Buy | LTP: Rs 87.30 | Stop-Loss: Rs 78 | Target: Rs 100 | Return: 14.5 percent
It has corrected approximately 25 percent since reaching a high near Rs 110 on September 15, 2023. At the current juncture, it has taken support near Rs 200 daily exponential average, i.e., Rs 85 levels, which is also the previous swing high.
On the indicator, the daily RSI (relative strength index) has made an impulsive structure near the oversold zone of 30, which is looking lucrative. One can buy in the range of Rs 84–87 with a target of Rs 100, and the stop-loss would be Rs 78 on a daily close basis.
Tata Elxsi: Buy | LTP: Rs 7,617 | Stop-Loss: Rs 7,299 | Target: Rs 8,100 | Return: 6 percent
Since the last 2 months or so, the said counter has made a nice base near the 100-daily exponential average. At the current juncture, it is nicely placed near 21 DEMA.
On the indicator front, the daily RSI has reversed from 50 levels along with an ongoing positive cross on daily DMI (directional movement index), which is looking lucrative. Thus, one can buy in the range of Rs 7,500–7,625 with an upside target of Rs 8,100 and a stop-loss of Rs 7,299 on a daily close basis.
City Union Bank: Buy | LTP: Rs 138.8 | Stop-Loss: Rs 128 | Target: Rs 155 | Return: 12 percent
City Union Bank has been under pressure for some time, but at this juncture, it is trading near its crucial support. Previously, the stock turned from this level, and we saw a rally towards Rs 200.
On the weekly chart, a range breakout has seen with massive volume, which is looking lucrative. Thus, we advise traders to go long in the stock in the range of Rs 136-139, with a stop-loss of Rs 128 and a target of Rs 155.
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!
