The Nifty declined through October 9 as fear of a wider conflict between Israel and Hamas intensified. At close, the benchmark index was down 141.2 points at 19,512.4. Volumes of the NSE cash segment were the lowest since June 27.
Short-term trend of the Nifty remains weak as the index trades below its 11-day and 20-day EMA (exponential moving average). On the derivative side, we have seen aggressive Call writing at 19,700-19,800 levels which coincides with the previous swing high of 19,767, made on September 28.
Therefore, on the higher side, 19,700-19,800 can be considered as an immediate resistance for the Nifty and one should remain cautious till it closes above 19,800.
Low of last week, which is placed at 19,333, could act as an immediate support for the Nifty. Positional support is expected at 19,100, which happens to be the level derived from the upward sloping trendline, adjoining major swing tops of October 2021 (18,604) and December 2022(18,887).
Broadly speaking, the Nifty is in the range of 19,100-19,800. A close above 19,800 or below 19,100 will dictate the clear trend. Positional traders are advised to remain cautious till it closes above the 19,800 levels.
After a massive outperformance since 2022, the short-term trend in the Midcap and Smallcap indices turned weak as the indices closed below their short-term important moving averages. We believe that midcaps/smallcap stocks are likely to witness some running correction for the coming few weeks before they resume their primary uptrend. Therefore, our advise is to be very selective in buying midcap-small cap stocks for short-term gains.
Here are three recommendations for the next 3-4 weeks:
IRB Infrastructure Developers: Buy | LTP: Rs 31.2 | Stop-Loss: Rs 29 | Target: Rs 33.75-35 | Return: 12 percent
The stock price has broken out from the downward sloping trendline on the weekly chart, adjoining the highs of December 16, 2022 and May 19, 2023. Primary trend of the stock is positive as stock price is trading above its important weekly moving averages.
Max Financial Services: Buy | LTP: Rs 896 | Stop-Loss: Rs 850 | Target: Rs 950-985 | Return: 10 percent
The stock price has broken out on the monthly chart from the downward sloping trendline. Primary trend of the stock is positive as stock price is placed above important moving averages. Stock price has corrected around 5 percent from the recent high which we believe is a buying opportunity for the near term.
Hindustan Copper: Sell | LTP: Rs 149 | Stop-Loss: Rs 158 | Target: Rs 139-135 | Return: 9 percent
The stock price has broken down on the daily chart by closing below multiple supports of Rs 151-152 odd levels with higher volumes. Short term trend of the stock turned weak as stock price has closed below its important short term moving averages.
RSI Oscillators is sloping downwards and placed below 50 on the daily chart, indicating strength in the downtrend of the stock.
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