Stock Market Outlook today
The Nifty held the 23,850–23,800 support zone and witnessed a smart rally throughout the day. It reversed most of the previous trading session’s losses and thereby formed a bullish piercing line candlestick pattern indicating aggressive buying. Drops toward support levels are being bought despite weak global cues, suggesting aggressive buyers are absorbing selling pressure. Momentum indicator RSI sustaining above the 50 level keeps the bullish sentiment intact. Going ahead, we expect the upmove to continue towards the 24,400 – 24,450 zone which coincides with the 200-day moving average (24,444) and the previous swing high (24,482). The Bank Nifty led from the front with contribution coming in from the heavyweights HDFC BANK , ICIC BANK, AXIS Bank and SBIN helping it close with gains of 1.72 per cent (~1000 points). It formed an Outside Bar pattern on the daily charts, thereby setting firm support at the 57,100 – 57,000 zone from a short term perspective. According to the options chain, Bank Nifty closed above the 58,000 mark which has a significant concentration of Call Open Interest. This, coupled with a 21 per cent rise in June futures open interest, implies a call writer trap. The next significant open interest concentration is at the 60,000 strike suggesting the next resistance is more than 900 points away and hence we can expect further short covering resulting in higher levels.
Stocks to buy by Jatin Gedia of Teji Mandi
AU BANK
Current Market Price: ₹1,067.20 Stop Loss: ₹1,040 Target: ₹1,125 The AU Bank stock has witnessed a price volume breakout after a seven day consolidation suggests resumption of primary uptrend. A rising ADX above 20 suggesting strong trend strength.
Ramco Cements
Current Market Price: ₹913.75 Stop Loss: ₹885 Target: ₹985 The Ramco Cements stock has seen a breakout from an ending diagonal pattern and the formation of higher highs and higher lows suggest a short-term trend reversal. Positive divergence and Bullish crossover on MACD suggests a Buy signal.
Exide Industries
Current Market Price: ₹399.50 Stop Loss: ₹389 Target: ₹430 Exide stock witnessed a Flag and Pole pattern breakout accompanied with high volume suggests resumption of the next leg of the upmove. RSI above 60 levels keeps the bullish sentiment intact. Disclaimer: This article is written by Jatin Gedia, VP – technical research, Teji Mandi Investment Technologies. Views expressed are his own. Readers’ discretion is advised.