The Nifty ended the second straight session in the green on September 4, rising 94 points to 19,529 at the close. The primary and intermediate trends in the Nifty remained positive as it held above 50, 100 and 200 day EMA (exponential moving average).
Short-term trend in the Nifty turned positive as it is placed above its 5 and 20-day EMA. Momentum Indicators and Oscillators like RSI (relative strength index) and MFI (money flow index) are showing strength in the current uptrend.
On the derivative side, we have seen aggressive Put writing at 19,200-19,300 levels, which coincides with the swing low of 19,223 made on August 31. Therefore, on the downside, 19,200-19,300 could now be considered as an immediate support for the Nifty.
High of last week in the Nifty is placed at 19,584, which could now act as an immediate resistance for the index. Above 19,584, it could move towards the next resistance of 19,645-19,868 for the coming weeks. Traders are advised to hold longs with stop-loss of 19,200 on the closing basis.
Broader market indices like Midcap and Smallcap have outperformed in the CY22 where they have gained 26 percent and 29 percent as against 8 percent rise in the Nifty till now. Breadth of the market is very strong as more than 87 percent of the stocks are trading above their 200 DMA in NSE500. We expect their outperformance to continue for the coming weeks.
Here are three recommendations for the next 3-4 weeks:
GAIL India: Buy | LTP: Rs 122.70 | Stop-Loss: Rs 115 | Targets: Rs 131-137 | Return: 12 percent
The stock price has broken out on the weekly chart by surpassing the multiple top resistance of Rs 115 odd levels. Momentum Oscillators like - RSI (11) and MFI (10) are sloping upwards and placed above 60 on the weekly chart, indicating strength in the current uptrend of the stock.
PSU as a sector is showing strength on the short to medium term chart.
GSFC: Buy | LTP: Rs 187.3 | Stop-Loss: Rs 170 | Targets: Rs 206-215 | Return: 15 percent
Gujarat State Fertilizers & Chemicals has broken out from the downward sloping trendline on the weekly chart adjoining the weekly high of April 8 and May 19, 2023. Stock price has broken out on the daily chart by surpassing the resistance of Rs 183 levels with higher volumes.
Plus DI (directional indicator) is trading above minus DI while ADX (average directional index) line is placed above 25, indicating stock price is likely to gather momentum in the coming days. (Note : Stock price is going to go ex-dividend of Rs 10 on September 7)
Uttam Sugar Mills: Buy | LTP: Rs 403 | Stop-Loss: Rs 375 | Targets: Rs 435-450 | Return: 12 percent
The stock price has broken out on the daily chart with higher volumes. It has broken out from the downward sloping trendline on the weekly chart. Stock price has been forming bullish higher top higher bottom formation on the weekly chart.
Sugar sector has started outperforming the broader market during last few days.
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