What levels you will be tracking for Nifty 50. For Nifty as well as Bank Nifty, we are trading below their key support levels but Friday’s sentiment was actually the opposite. So, going ahead, how do you see the market direction?
It was the second day where we have seen Bank Nifty trying to hold this 39,000 level and we have seen a recovery, especially in the last half an hour of trade post the announcement of the HDFC-HDFC Bank merger.
So, Bank Nifty witnessed some short covering in some of the call writing which was there at around 39400-39500 strikes. Some call writers have covered their position as Bank Nifty has moved up above 39500 levels, especially in the last hour of trade. Hence looking at the overall setup, we believe that some more positive moves can be expected in the coming week. But again 40000 is likely to act as a major hurdle as of now.
Till the time the Bank Nifty does not cross this 40000 level a major short covering is not going to happen in the system. Most of the call writers for monthly expiry are writing the position around 40000 strike.
So above 40000, with another round of short covering we can expect Bank Nifty to move higher towards 40500 which is the next target we can expect above 40000 level. But as of now, the structure is still weak.
Shorts are there in the system for Nifty as well as for the Bank Nifty. If we talk about Nifty, 17300 is the key level on the higher side and until it crosses above 17300, the sell-on-rise is the strategy for Nifty.
17250 is the immediate hurdle which we are expecting for this pullback. Further, though Nifty managed to gain some price points during the last hour of trade, 17,200-17,250 are the immediate challenging level on the higher side. And if it does not cross these levels then again some shorts we can expect around these levels.
On the breakdown of the 17020 level this downtrend is likely to continue further and maybe we can see 16850 again on the lower side.
So still the trend is weak and sell-on-rise is the strategy. 17300 is the stop-loss for Nifty. For Bank Nifty 40000 is the key level on the higher side if any pullback comes in the coming trading sessions.
Going ahead, which are some of the counters that are on your radar, would you like to share that?
First stock from the real estate space is DLF that is definitely a buy. The stock after a corrective action has formed a base at around Rs 350 level and has managed to give a breakout of its previous swing high. So now if the stock continues to hold above Rs 360 then possibly it can scale up further higher from the current level and the next target for the stock which we are projecting is around Rs 398. So one can buy with a stop loss of Rs 373-360 and the upside target is Rs 398 for DLF.
Another stock is from the FMCG pack and that is Godrej Consumer Products. Overall structure of the stock is positive. Now stock is penetrating its multiple resistance zone on the weekly chart as well as on the daily chart, so looking at the overall structure and the buying action which we have seen in the counter on Friday, we believe that this stock can continue its upward momentum and in this continuation, we are expecting target of Rs 980 on the higher side and one can keep a stop loss of Rs 930.
Third stock from the midcap space is APL Apollo. Stock was in downtrend but on Friday we saw very strong buying action. Now stock is trading above the 50 day-100 day moving average. Friday’s move has given a breakout of its falling trend line on the daily chart. And looking at the breakout on APL Apollo, we believe that this momentum is likely to continue further in the coming week and Rs 1330 could be the possible target on the higher side. One can buy APL Apollo with stop loss of Rs 1225.