The Sensex and the Nifty closed below their all-time highs on September 12 after rallying for seven sessions in a row. Midcaps and smallcaps saw a sharp fall, with 90 percent of stocks ending in the red. Midcap and small-cap indices recorded the biggest single-day fall of 2023.
The Nifty50 index showed profit-booking at the 20,000 mark after a strong rally from the 19,200 levels. This is not surprising as 20,000 is a psychological level and many investors may have taken profits at that point.
The next hurdle for the Nifty is 20,164. If the index breaches this level, it may move up to the 20,300 and 20,500 levels. However, if the index fails to break 20,164, it could come down to the 19,950 levels, which is the first and key support.
The overall trend of the Nifty is still positive and it is likely to continue to move up in the medium term. However, there could be some profit-booking at the 20,000 level and the index may consolidate for some time before moving up again.
Bank Nifty has also showed profit-booking in the last trading session after witnessing a breakout of W-formation above 45,000. The immediate resistance zone for Bank Nifty is 45,800. If the index can break this level, it could move up to 46,300 levels. However, if the index fails to break the 45,800 levels, it could come down to 45,100-44,900 levels, which is the immediate demand zone.
Here are three buy calls for short term:
Infosys: Buy | LTP: Rs 1,501 | Stop-Loss: Rs 1,460 | Target: Rs 1,584 | Return: 6 percent
The counter has witnessed the breakout of an ascending triangle formation with huge volume. The breakout coincides with rising volume, and it manages to sustain above the breakout level despite weakness in the broader market.
It is trading above its all-important moving averages with a positive bias in momentum indicators. On the downside, Rs 1,475 will act as a strong support; below this, Rs 14,60 is the next support levels.
It is respecting its 9 and 20-DMA beautifully, which is a classic sign of trend strength.
Narayana Hrudayalaya: Buy | LTP: Rs 1,040 | Stop-Loss: Rs 970 | Target: Rs 1,160 | Return: 12 percent
The counter is in a classical uptrend where it is forming a symmetrical triangle formation after building a strong base at its 9, 20, and 50-DMA. A breakout will be confirmed when it crosses Rs 1,050.
On an immediate basis, Rs 1,050 is the horizontal resistance line; above this, we can expect a rally towards Rs 1,160 levels.
On the downside, Rs 970 is an immediate and strong support. Momentum indicators are positively poised to support the current strength of the trend.
ITC: Buy | LTP: Rs 451 | Stop-Loss: Rs 435 | Target: Rs 476 | Return: 5.5 percent
After a classical move, the counter has moved into the consolidation phase, but it is trying to bottom out and will move towards Rs 460. The structure of the counter looks lucrative for long-term investors, as it is trading above all its important moving averages.
Both the RSI (relative strength index) and MACD (moving average convergence divergence) indicators are supportive of the current strength in the stock's momentum.
On the upside, Rs 460 is an important psychological level; above this, we can expect a move towards Rs 476+. On the downside, a cluster of moving averages at around Rs 435 is a strong demand zone during any correction.
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