The broad-based rally that took the benchmark beyond 19,400 points at close on September 1, helped the market kick off the September series on a bullish note. Considering the momentum in key sectors, if the Nifty50 decisively surpasses 19,500, then 19,650 is expected to be the crucial area for sharp up-move, while the critical support remains at 19,300-19,250, experts said.
The Nifty50 gained 0.9 percent during the week ended September 1 and formed a bullish candlestick pattern on the weekly charts, followed by an inverted hammer pattern in the previous week.
Also, the index has managed to snap its five-day losing streak, lifted by metals, infrastructure, banking and financial services, technology and auto stocks.
"Now, the sacrosanct support zone of 19,300–19,250 has certainly proved its significance and we have closed out weekly trade on a promising note. It’s important for this move to be extended in the next couple of sessions, but if this doesn’t happen, then we may certainly be gearing up ourselves for some challenging times," Sameet Chavan, head research, technical and derivatives at Angel One, said.
He feels once the sturdy wall of 19,500–19,600 is taken out, the slumber phase will finally come to an end.
Nagaraj Shetti, technical research analyst at HDFC Securities also further upside in Nifty in the short term. The next overhead hurdles to be watched around 19,600 and 19,800 levels in the next couple of weeks, while immediate support is placed at 19,350 levels, he said.
The Nifty Midcap 100 and Smallcap 100 indices gained 2.5 percent and 4.4 percent last week. The mid-cap and small-cap spaces are enjoying their merry run, which remains to be the real flavour on the street, said Chavan.
Let's take a look at the top 10 trading ideas by experts for the next three-four weeks. Returns are based on the September 1 closing prices:
Expert: Subash Gangadharan, senior technical & derivative analyst at HDFC Securities
Gujarat Alkalies and Chemicals: Buy | LTP: Rs 732 | Stop-Loss: Rs 655 | Target: Rs 880 | Return: 20 percent
Gujarat Alkalies has shown relative strength this week. While the Nifty has gained 0.88 percent last week, the stock has gained a healthy 12 percent. In the process, the stock has closed above its recent trading range on the back of above average volumes, which augurs well for the uptrend to continue.
Technical indicators are giving positive signals as the stock is trading above the 20 and 50-day SMA (simple moving average). Momentum readings like the 14-week RSI (relative strength index), too, are in rising mode and not overbought, which implies potential for further upsides.
With the intermediate technical setup too looking attractive, we expect the stock to move up towards its previous intermediate highs in the coming weeks. One can buy between Rs 728-732 levels, with a stop-loss at Rs 655 and target of Rs 880.
Laxmi Organic Industries: Buy | LTP: Rs 298 | Stop-Loss: Rs 264 | Target: Rs 370 | Return: 24 percent
After touching a low of Rs 220 in March 2023, Laxmi Organic has gradually climbed higher and made higher tops and higher bottoms. Last week, the stock has broken out of its recent trading range on the back of above average volumes. Intermediate momentum readings like the 14-week RSI too are in rising mode and not overbought. This augurs well for the uptrend to continue.
With the intermediate technical setup, too, looking positive, we believe the stock has the potential to move higher in the coming weeks. We recommend a buy between Rs 296-300 levels, with a stop-loss at Rs 264 and target of Rs 370.
Fine Organics Industries: Buy | LTP: Rs 4,817 | Stop-Loss: Rs 4,530 | Target: Rs 5,300 | Return: 10 percent
After correcting from an intermediate high of Rs 5,809 tested in January 2023, Fine Organics found support around Rs 4,040 levels in March 2023. These are strong supports as they also roughly coincide with previous intermediate lows.
The stock has since then been climbing higher and making higher bottoms in the process. This week, the stock also broke out of its recent trading range on the back of healthy volumes, indicating it is set to move higher in the coming weeks.
Technical indicators are giving positive signals as the stock is trading above the 20 and 50-day SMA. Momentum readings like the 14-week RSI too are in rising mode and not overbought, which implies potential for further upsides.
With the intermediate technical setup too looking attractive, we expect the stock to move up towards its previous intermediate highs in the coming weeks. Buy between Rs 4,820-4,830 levels, with a stop-loss at Rs 4,530 and target of Rs 5,300.
Expert: Viraj Vyas, CMT, technical & derivatives analyst - institutional equity at Ashika Stock Broking
LTIMindtree: Buy | LTP: Rs 5,303 | Stop-Loss: Rs 5,090 | Target: Rs 5,950 | Return: 12 percent
Following its impressive performance in the wake of the March 2020 rally, the stock experienced a significant downturn amid the broader IT sell-off in early 2022. However, starting from June 2022, both the stock and the entire IT sector have been engaged in a consolidation phase, characterized by a positive bias. This suggests that the phase of price correction has reached its conclusion.
Of late, there has been a notable breakout above Rs 5,300 levels, accompanied by a pattern of forming higher lows. These developments are clear indicators of mounting buyer enthusiasm.
Maruti Suzuki India: Buy | LTP: Rs 10,331 | Stop-Loss: Rs 9,900 | Target: Rs 11,600 | Return: 12 percent
The stock has lagged its peers in the automotive sector for some time. However, it appears that the stock has finally concluded a 5.5-year period of time and price correction. This is evident as its price has now surpassed the levels seen in 2018.
Since the beginning of this year, the stock has been exhibiting a pattern of higher highs and higher lows. Its ability to maintain levels above Rs 10,000-9,900 zone bodes well for potential further bullish momentum.
In the near future, the stock may target Rs 12,000, and there's potential for an even larger target of Rs 15,000 in the coming months. This indicates a potentially strong uptrend for the stock.
RITES: Buy | LTP: Rs 510 | Stop-Loss: Rs 490 | Target: Rs 575 | Return: 13 percent
The stock has been following a robust price trend since the beginning of this year. What's more, since June, it has experienced significant momentum acceleration, which aligns with a renewed interest in the sector it belongs to.
Notably, the stock appears to have broken out of a Flag and Pole pattern on its weekly chart. This breakout suggests that there is potential for further momentum in the stock.
In the coming weeks, it's expected that the stock could reach levels around 580-600, indicating a potentially strong upward movement.
Expert: Shrikant Chouhan, head of research (retail) at Kotak Securities
Bandhan Bank: Buy | LTP: Rs 235 | Stop-Loss: Rs 225 | Target: Rs 260 | Return: 11 percent
Since the stock hit a low of Rs 210, it is making a series of higher bottoms. On a weekly basis, the stock managed to close above all-important averages.
Based on the formation, we believe that the stock is headed towards the next resistance, which lies between Rs 255-260 levels. To create any long position, traders need to place the stop-loss at Rs 225.
Cummins India: Buy | LTP: Rs 1,706 | Stop-Loss: Rs 1,630 | Target: Rs 1,930 | Return: 13 percent
On Friday, the stock made a sharp recovery after taking support near Rs 1,670. The Rs 1,670 level is very relevant, as it is the 61.80 percent retracement of the entire rally, which we saw between Rs 1,480 and Rs 1,980 levels.
The stock is also witnessing volume-based activity on both exchanges. It has formed a reversal formation on a daily basis based on candlestick formation. It is a buy at current levels. To maintain a long position keep a stop-loss at Rs 1,630. At higher levels, it may move towards Rs 1,830 and Rs 1,930 in the next few days.
Orient cement: Buy | LTP: Rs 200 | Stop-Loss: Rs 190 | Target: Rs 232 | Return: 16 percent
On a weekly and monthly basis, the stock is managing to withstand the selling pressure, which stood at Rs 185. On a daily basis, it has formed a continuation formation range between Rs 200 and Rs 172 levels.
On Friday, it managed to close above Rs 195 levels, which could lift the stock to Rs 232, which was its all-time high. However, it may face minor resistance at Rs 215. It is a buy at current levels and keep a stop-loss at Rs 190.
Expert: Mitesh Karwa, research analyst at Bonanza Portfolio
LIC Housing Finance: Buy | LTP: Rs 433 | Stop-Loss: Rs 412 | Target: Rs 465 | Return: 7 percent
LIC Housing Finance has seen breaking out of a downward sloping trendline on the weekly timeframe after more than two years with a big bullish candlestick and above average volumes, adding to it the stock is trading and sustaining above all its important EMAs which can be used as a confluence towards the bullish view.
On the indicator front, the Ichimoku Cloud is also suggesting a bullish move as the price is trading above the conversion line, base line and cloud. Momentum oscillator RSI (14) is at around 62 on the daily time frame indicating strength by sustaining above 50.
Observation of the above factors indicates that a bullish move in LIC Housing Finance is possible for target upto Rs 465. One can initiate a buy trade in between the range of Rs 428-431, with a stop-loss of Rs 412 on daily closing basis.
Mangalam Cement: Buy | LTP: Rs 355 | Stop-Loss: Rs 324 | Target: Rs 403 | Return: 13.5 percent
Mangalam Cement has seen a breakout of downward sloping resistance trendline on the weekly timeframe with a bullish candlestick and above average volume after two years which indicates strength as the stock is also trading above all its important EMAs (exponential moving average) on the daily timeframe which acts as a confluence.
The Supertrend Indicator is also indicating a bullish continuation which supports the bullish view. Momentum oscillator RSI (14) is at around Rs 63 on the daily time frame indicating strength by sustaining above 50. The Ichimoku Cloud is also suggesting a bullish move as the price is trading above the conversion line, base line and cloud.
Observation of the above factors indicates that a bullish move in Mangalam Cement is possible for target upto Rs 403. One can initiate a buy trade in between the range of Rs 403, with stop-loss of Rs 324 on daily closing basis.
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