This week’s trading session begins on a positive note with Sensex reaching over 59,000 and Nifty 50 above 17,600 on Monday. Indian equities recovered last week’s some losses. Bank Nifty picked up over 40,900. A rebound was witnessed in broader sectoral indices as investors were prompted to add beaten-down stocks to portfolios. Buying in FMCG, auto, and banking stocks offset the bearish tone of capital goods and metal stocks. Although, overall, global markets outlook remains volatile ahead of US Federal Reserve’s monetary policy outcomes. FOMC is set to meet from September 20 to 21. Expectations of another aggressive rate hike are on the cards from Fed. On Tuesday’s trading session, Rajesh Palviya, VP – Technical and Derivative Research, Axis Securities recommends three stocks to buy.
On September 19, Sensex closed at 59,141.23 up by 300.44 points or 0.51%. Nifty 50 ended at 17,622.25 higher by 91.40 points or 0.52%. Bank Nifty finished at 40,904.40 surging by 127.60 points or 0.31%.
According to Rajesh Palviya, VP – Technical and Derivative Research, Axis Securities, on the daily chart, the index has formed a small bullish candle with shadows on either side representing extreme volatility. The index is moving in a Higher Top and Higher Bottom formation on the daily chart, indicating a sustained up trend in the medium term. The index broke below the upward sloping trend line in the previous day’s trade, whereas it is not able to take out 20 SMA placed at 17677, which is the crucial level to watch out for. The chart pattern suggests that if the Nifty crosses and sustains above the 17700 level it would witness buying, which would lead the index towards 17800-17900 levels. Important Support for the day is around 17550. However, if the index sustains below 17550, it may witness profit booking, which would take the index towards 17450-17350 levels. Nifty is trading above 50, 100, and 200-day SMA, indicating positive bias in the short to medium term.
Palviya said, Nifty continues to remain in an uptrend for the short term, so buying on dips continues to be our preferred strategy.
“The daily strength indicator RSI is moving downwards and is quoting below its reference line, indicating negative bias,” he added.
Giving Bank Nifty outlook, Palviya said, on the daily chart, the index has formed a small bullish candle with shadows on either side representing extreme volatility as well as indecisiveness amongst participants regarding the direction. The index is holding a lower band of the rising channel. Breaking and sustaining below the lower band of the rising channel will open the downside and if the index holds the lower band of the channel it can rally towards the upper band. The index is moving in a Higher Top and Higher Bottom formation on the daily chart indicating a short-term up trend. The chart pattern suggests that if Banknifty crosses and sustains above the 41050 level it would witness buying which would lead the index towards 41200-41500 levels. Important Support for the day is around 40850.
However, he added, if the Nifty Bank index sustains below 40850 then it may witness profit booking which would take the index towards 40700-40x levels. Bank Nifty is sustaining above its 20, 50, 100, and 200-day SMA which signals bullish sentiments in the near term. Banknifty continues to remain in an uptrend in the medium and long term, so buying on dips continues to be our preferred strategy.
He also said, the daily strength indicator RSI continues to remain flat and is below its reference line indicating an absence of momentum on either side
Axis Securities expert recommends three stocks to buy and sell on September 20.
Buy Poonawala Fincorp at ₹323 with a stop loss of ₹315 target of ₹345
Buy Maruti Suzuki at ₹9295 with a stop loss of ₹9180 target of ₹9450
Buy Welspun Corp at ₹266 with a stop loss of ₹255 target of ₹280
The views and recommendations made above are those of individual analysts, and not of Mint.
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