The Nifty jumped more than 400 points to scale a fresh all-time high of 20,702. At present, indices like the Nifty, Nifty500, Nifty100, Nifty200, Midcap100 and Smallcap 100 are placed at their all-time highs. The Nifty has been hitting fresh all-time highs for last two trading sessions and has reached into an uncharted territory.
Immediate support for the Nifty has now shifted up at 20,500-odd levels. Positional support for the Nifty is expected at 20,222, derived from previous swing high.
Immediate resistances for the Nifty are seen at 20,743 and 21,193, which happen to be 50 percent and 61.8 percent Fibonacci extension levels of the swing seen from the bottom 16,828 (March 2023) to the top 20,222 (September 2023) and from 20,222 to bottom of 18,837 (October 2023).
More than 87 percent of the stocks from NSE500 are trading above their 200 DMA (day moving average) at the moment, indicating strong breadth. The Nifty Midcap 100 Index has gone through the roof and has been rising for last 22 trading sessions consistently, while the Nifty Smallcap 100 has broken out from the upward sloping trend line, adjoining year 2008, 2018 and 2022 tops.
Brent crude has witnessed a fall more than 20 percent from its recent peak of $97 a barrel. This Augers well for the Indian market. The US 10-year bond yields have fallen more than 16 percent from their recent peak of 5. This indicates the probability of interest rate trend reversal. Falling bond yields could improve the sentiment in global equity markets.
The ICE Dollar Index has fallen 4 percent from its recent peak of 107. It has a negative correlation with gold and, therefore, we can see continuation of an uptrend in gold as an asset class. US gold has hit an all-time high and has broken out from long term consolidation. Baltic Dry Index, which is often viewed as a leading indicator of world economic activity has risen five-fold since February 2023
We believe that the Nifty is in continuation of and uptrend and dips should be utilised to accumulate longs.
Here are three buy calls for short term:
Life Insurance Corporation of India: Buy | LTP: Rs 719 | Stop-Loss: Rs 670 | Target: Rs 800-860 | Return: 20 percent
The stock price has broken out from downward sloping trendline on the weekly chart. The stock has recently surpassed the previous top resistance of Rs 691. Price breakout is accompanied by jump in volumes.
Primary trend for the stock has been bullish as it has been trading above all important moving averages. Indicators and oscillators like DMI (directional movement index) and RSI (relative strength index) have turned bullish on the daily charts. PSU and life insurance sector stocks have started performing after long time.
India Cements: Buy | LTP: Rs 254 | Stop-Loss: Rs 237 | Target: Rs 282 | Return: 11 percent
The stock price has broken out from downward sloping channel on the weekly chart. Stock found support on its 100-week EMA (exponential moving average) and reversed north.
It is holding above its 20, 50, 100 and 200 DEMA, which indicates bullish trend on all time frame. Indicators and oscillators like DMI and RSI have turned bullish on the daily charts. Cement sector has started outperforming.
Bank of India: Buy | LTP: Rs 109.2 | Stop-Loss: Rs 102 | Target: Rs 125 | Return: 14.5 percent
The stock price has been finding support on its 20-day EMA, currently placed at Rs 104. Primary trend for the stock has been bullish as it has been trading above all important moving averages.
The stock price has formed bullish inverted head and shoulder pattern on the daily chart. Indicators and oscillators like DMI and RSI have turned bullish on the daily charts. PSU Bank Index has resumed its primary uptrend after small consolidation
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