Indian Stock Market had a soft opening during the last week. However, bulls made their presence in all four trading sessions to take the markets towards the new highs. Banking space has provided a helping hand that pushed the major indices into uncharted territory. On the weekly charts, Nifty has given an ascending triangle breakout, indicating a possibility of continued upward momentum. The stock-specific action will likely continue in the coming week, our advice is that traders should bet on such opportunities.
Stock Market Summary
Last week, Indian stock market resumed the upside rally. Nifty & Bank Nifty closed the week on record highs levels. Bank Nifty index outperformed the Nifty index by 1.5%. Both the indices witnessed an addition of long positions, to close the week on a higher note. Bank nifty rallied 4.01% whereas Nifty 50 rallied 2.64% higher on weekly basis. The RBI (Reserve Bank of India) policy meeting outcome last week was quite balanced.
Banking stocks like HDFC Bank, SBI & ICICI Bank were among the top outperformers, contributed the majority of the index gains.
The strong quarterly results numbers posted by Infosys, Wipro, and Mindtree relieve anxiety of market that arose after weak TCS’s results, weighed on the overall IT index.
Among sectors, the Nifty index underperformed the other indices, closed with a gain of 0.11% on a weekly basis
Nifty PSU, Auto, Metal, Media were the outperformers of the week with gains of 8.29%, 6.97%, 6.35%, 5.21% respectively.
During last week FII were the net buyers as they bought 1038 crores of shares. Whereas DII were the net seller of the securities as they sold worth 3297 crores of shares.
Both Nifty and Bank Nifty marked fresh breakouts, indicating a possibility of continued upward momentum. On the sectoral front keep an eye on metal stocks, we can see good momentum in the coming days due to rising base metal prices.
HDFC Bank Strong quarterly results numbers which came on Saturday (16th Oct 2021) beats estimates, Nifty and Bank Nifty likely to fire on Monday. Also, Dow Jones up by 900 points in last 2 days is also indicating strong start for Indian equity markets.
Technical View of Stock Market
Nifty breached its yet another psychological level of 18000 and continued to trade above it. The index futures closed the week around 18355 shown massive upside momentum.
Weekly price action has formed a bullish candle with a small lower shadow, indicating that the dips were being bought by the investors and traders. Momentum Indicator Stochastic on the weekly time frame has given the bullish crossover.
While seeing at the daily chart, we observe that from the past half a month index is trading inside an ascending parallel channel. According to this immediate upside resistance is around 18450, in the coming days.
Nifty spot closed at 18338.55 this week, against a close of 17895.20 last week. The Put-Call Ratio has increased from 1.30 to 1.44.
As far as levels are concerned, 18200 followed by 18000 are to be seen as strong supports for the coming days. Here, 18000 holds a key for the bulls and as long as it’s defended comfortably.
Immediate upside levels target/ resistance is 18450. Above this 18600 will act as next resistance, where some traders might book some profits. On closing above this levels will take the index towards 18750 and 18950.
On the options front, maximum Put Open Interest was seen at 18,000 followed by 17,500 strikes. While maximum call open interest was seen at 18500 followed by 19000 strikes. Minor Call writing was seen at 18800 then 18600 strikes, while meaningful Put writing was seen at 18000 then 18300 strikes. The data indicates that Nifty can trade between 18000 and 18500 in the immediate term.
We will advise traders to keep an eye on stock-specific action as we can see continued buying momentum in the coming week.
Nifty Futures Strategy for Monday
Resistance at 18370 and Support at 18280.
Strategy – Either buy above 18370 for the targets of 18410—18450 or Sell below 18280 levels for the downside targets of 18220—18170.
Huge buying momentum on the last day of the short week has resulted in the new highs in the Bank Nifty. The index closed the week around 39408 levels.
Banking stocks have provided a helping hand because of the accelerated buying momentum. Some bank which supported the bank nifty last week are HDFC Bank, Kotak Mahindra Bank, SBIN, Federal Bank.
The index has shown resilience and continued to trade above the 50 days EMA on the daily chart, forming higher highs and higher lows kind of pattern.
Among the oscillators the daily stochastic remain in an uptrend. Also the RSI has closed above the 70 levels, thus support the positive bias in the index.
The index has a major support base at the 37000 level which is in confluence with the rising demand line joining the lows of the month of July and August.
A sustained move above the 39000 may witness an up move towards the 39800 and 40000. While on the downside the major support is at 38800 and 38500.
Nifty Bank Futures strategy for the day
Resistance at 39450 and Support at 38900.
Strategy – Either buy above 39450 for the targets of 39600—39750 or Sell below 38900 levels for the downside targets of 38700—38500.
Top Stock Recommendation for the upcoming week
MAX HEALTHCARE (CASH)
The stock has formed a bullish engulfing candle on the daily chart and formed a green Doji on the weekly chart. We have seen a major reversal from current levels in the stock.
Strategy – Traders can enter in this counter on dips around 344-342 for the initial upside target of 365 and then to our next target of 380 in coming days. Support and stop loss will be below 325 on a closing basis.
BHARTI AIRTEL (FUTURES)
BHARTI AIRTEL formed the falling wedge pattern on a 1-hour time frame and also forming a triangle pattern. This bullish pattern indicates that the buyers are accumulating the stock for the upside move. If the price break the triangle pattern then we can expect a good upside move in the coming days.
Strategy – Traders can buy this stock above 697 for the upside move till 710 and then 720 in the coming days. Support and stop loss below 684 on a closing basis.
Traders can trade safely in Nifty, Bank Nifty and Top Stock Picks with levels only. Click on the image given below get real time stock market news, updates, levels and recommendations on your WhatsApp.
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