Nifty Outlook
The festive week was action-packed, ultimately favoring the bulls. It started on a cautious note, testing levels around 24,750, but as the week progressed, prices defended key support and moved higher. The biggest surprise came on Thursday, when within just two hours, prices shot up by over 400 points, marking a fresh new high.
However, Friday lacked major traction, but the week still ended strong with over 2 per cent gains, closing just above 25,350.
After a brief pause last week, the primary uptrend has resumed with prices forming new higher highs and higher lows on the daily chart.
This trend suggests that corrections are getting shorter, reflecting a strong bullish undercurrent where minor dips are quickly bought into. Moving forward, dips towards key support levels can be viewed as buying opportunities. While there are no immediate signs of weakness, the momentum oscillator RSI Smoothened has failed to surpass its previous high, signaling a 2-Point Negative Divergence on the daily chart.
With the upcoming Fed policy, booking profits at higher levels would be wise to account for potential volatility. For levels, 25,200 serves as immediate support, while Thursday’s rally point of 25,000 – 24,970 is seen as strong support.
On the higher side, 25500 – 25600 could act as resistance, as it aligns with the Bearish Wolfe Wave; reversal zone, followed by 25800 being the next retracement resistance. Traders should monitor these levels closely and set up their trades accordingly.
This week also saw sector rotation, with defensive sectors performing well initially, but struggling later, while previously underperforming sectors like PSU Banks and Realty picked up. Traders should focus on identifying the right themes for outperformance opportunities.
NSE Scrip – CEAT
View – Bullish
Last Close – Rs 3,000
For over 8 months, stock prices have faced resistance around the 2,900 level. However, prices have now broken this range, confirming a strong ‘Inverse Head and Shoulders’ breakout. This breakout is accompanied by strong volumes and a bullish candlestick pattern.
Additionally, prices have closed above the upper band of the Bollinger Bands, signaling a robust uptrend following the recent
congestion phase. Despite trading within a range, prices have consistently maintained their 20 EMA
on every dip, indicating a strong positive undertone.
Hence, we recommend to BUY CEAT around Rs 3,000 – Rs 2,980 | Stop Loss: Rs 2,880 | Target 3,240
NSE Scrip – DLF
View – Bullish
Last Close – Rs 863
The realty sector has been in a consolidation phase for the past few months, and this stock has also experienced both price and time-wise consolidation. Technically, there are signs indicating that the stock has resumed its uptrend. On the daily chart, after forming a base at the 200 SMA, prices have shown strong positive traction and a range breakout.
Additionally, prices closed above the 20, 50, and 89 EMAs in a single day, highlighting the significance of the move, which is supported by increased volumes. Furthermore, the RSI Smoothened indicator, giving a fresh buy signal and crossing above 50, reinforcing the bullish outlook.
Hence, we recommend to BUY DLF around Rs 863 – Rs 857 | Stop Loss: Rs 834 | Target: Rs 920
(Rajesh Bhosale is an equity technical analyst at Angel One Ltd. Views expressed are his own.)
First Published: Sep 16 2024 | 6:28 AM IST
