Nifty started the past week on a positive note on October 4 and witnessed some momentum to reclaim 17,700 with an ease.
However, one day ahead of the weekly expiry, the market reacted to the global weakness. The index consolidated throughout the first half, but witnessed a sharp post mid-session to end the day tad above 17,600. The opening on the expiry day was absolutely a shocker for bears as the shaky global markets recovered overnight and remained firm thereafter. As a result, the Nifty continued its march towards the recent highs.
The RBI governor announced its monetary policy on Friday and the outcome was very much in line with the general consensus. Market did not look much excited as it turned out to be a non-event. There was no follow-up seen in key indices throughout the remaining part of the session. Eventually, Nifty ended the week around the 17,900-mark, which is the highest-ever close for our market.
Considering the recent behaviour of the market, it is pretty clear that the bulls are not willing to let go of their firm grip so easily. But we reiterate, it is that sort of phase of the market, which may not be easy to participate in. We are not at all convinced about trading aggressively on the long side at this moment. There could be some odd thematic moves that can be focused on, but do not want to go all guns blazing at such elevated levels.
As far as levels are concerned, 17,900 – 17,950 remains to be a sturdy wall. On the flipside, 17,600 has become a sacrosanct support now. The way we are following US markets of late, all eyes on them how they move going ahead.
Here is one buy call and one sell call for next 3-4 weeks:
Cigniti Technologies: Buy | LTP: Rs 626.40 | Stop Loss: Rs 602 | Target: Rs 670 | Return: 7 percent
On Friday, the entire IT space was on a roll just ahead of the TCS numbers. ‘Cigniti Technologies’ generally does not come into our recommendation list, but the way this smaller IT name moved on Friday, it has certainly caught our attention. On the daily time frame chart, we are witnessing a series of higher highs, higher lows and now the momentum oscillator like ‘RSI-Smoothened’ is sloping upwards, which is a sign of strength.
We recommend buying for a short-term target of Rs 670. The stop loss can be placed at Rs 602.
SBI Life Insurance Company: Sell | LTP: Rs 1,196.45 | Stop Loss: Rs 1,236 | Target: Rs 1,150 | Return: 3.9 percent
Most of the insurance-related stocks have been enjoying their strong Bull Run over the past few months. Since the March lows, this stock has given stupendous move as we can see two-fold returns in a span of merely 6 months. Although this stock does not have a habit of going through a corrective patch for a long time, we can see some signs of weakness in the near term.
Due to last three days' decline, the stock prices have slipped below their key short term moving averages. Hence, we expect this correction to extend in the coming week. One can look to sell on a bounce around Rs 1,210 - 1,220 for a target of Rs 1,150. The strict stop loss to be kept at Rs 1,236.
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