Nifty rallied sharply for the second consecutive session on September 23 as bulls continue to rule the Dalal Street after the government slashed the corporate tax in a bid to revive the economy. The index closed above 11,600 and formed a bullish candle, which resembled a spinning-top pattern on the daily charts as the difference between the opening and the closing price was only one-fifth of the day's gains.
Experts feel consolidation is likely in coming sessions, especially after the solid rally of previous two sessions. Traders are advised to avoid taking fresh longs. Experts expect the Nifty to surpass its key hurdles 11,800-11,900 levels soon and said supports now shifted higher to 11,000-11,300 levels.
The Nifty opened sharply higher at 11,542.70 and immediately saw some profit booking at higher levels as a result the index hit a day's low of 11,471.35. But, after that initial one-hour consolidation at higher levels, it again gained strength and remained strong for the remaining session, hitting an intraday high of 11,694.85.
The index closed at 11,603.40, up 329.20 points, or 2.92 percent, on top of 5.32 percent rally in previous session.
"On intraday basis, Nifty reached extreme resistance level which was at 11700. We need to be cautious while adding long positions at current levels. Put/Call ratio is at 1.48 and India VIX at 17 percent which indicates high risk in creating long positions on indices. The index is likely to remain in the range of 11700 and 11450," said Shrikant S. Chouhan, Senior Vice-President, Equity Technical Research at Kotak Securities.
The strong gains of the last two sessions have made investors richer by Rs 10.35 lakh crore as the cumulative market capitalisation of BSE listed firms has jumped to Rs 1,48,89,652.44 crore from Rs 1,38,54,439.41 crore on September 19. On September 23 alone, investors' wealth increased by Rs 3.52 lakh crore.
Among the broader indices, BSE Midcap outperformed the benchmark, surging 3.08 percent while BSE Smallcap closed the day with a gain of 2.73 percent, slightly behind the Sensex.
"The range for the plausible consolidation will be 11,500-11,700. The short term target on the higher side continues to be at 11,790 with potential to stretch higher. On the flip side, the gap area of 11,471-11,381 will now act as a key support zone for any minor degree dip. The gap area can be considered as a fresh buying opportunity should the Nifty attempt to test the same," said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan by BNP Paribas.
We spoke to Axis Securities and this is what they are recommending to buy:
Siemens: Buy | CMP: Rs 1,414 | Stop loss: Rs 1,350 | Target: Rs 1,490-1,530 | Upside: 8 percent On the daily chart Siemens has decisively broken out from its consolidation range of Rs 1,340-1,050 levels on closing basis and sustaining above the same. This breakout has accompanied with increase in volumes which supports bullish sentiments ahead.
Both the daily, as well as the weekly, strength indicator RSI and the momentum indicator Stochastic are in a positive territory which supports upside momentum to continue in the near term. The stock price is sustaining well above its 20- and 50-day SMA which supports bullish sentiments ahead. Buy the stock with target of Rs 1,490-1,530 with stop loss at Rs 1,350.
State Bank of India: Buy | CMP: Rs 313-306 | Stop loss: Rs 295 | Target: Rs 335-345 | Upside: 12 percent On the daily chart State Bank of India has decisively broken out from its Multiple resistance zone levels of Rs 295-300 levels on closing basis and sustaining above the same. This breakout has accompanied with increase in volumes which supports bullish sentiments ahead.
Both the daily, as well as the weekly, strength indicator RSI and the momentum indicator Stochastic are in a positive territory which supports upside momentum to continue in the near term. Stock price is sustaining well above its 20-,50- and 200-day SMA which supports bullish sentiments ahead. We recommend buying the stock with target of Rs 335-345 with stop loss at Rs 295.
Indraprastha Gas: Buy | CMP: Rs 355-345 | Stop loss: Rs 335 | Target: Rs 385-395 | Upside: 14 percent On the daily chart, Indraprastha Gas has decisively broken out from its Contracting Triangular pattern on closing basis and sustaining above the same. This breakout has accompanied with increase in volumes which supports bullish sentiments ahead. Both the daily, as well as the weekly, strength indicator RSI and the momentum indicator Stochastic are in positive territory which supports upside momentum to continue in the near term.
The stock price is sustaining well above its 20 and 50 and 100 day SMA which supports bullish sentiments ahead. The stock can be bought with stop loss at rs 335 for target of Rs 385-395.
(Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.)
