We saw alternate days of gains and alternate days of losses during the week. Is this a sign of continued consolidation, or do the recent gains indicate the start of a sustained positive trend?
It was the first day for the December series and the rollover was a bit on the higher side, but the series on the series is a negative close, so there was a short buildup in the Nifty data. Given the kind of recovery we saw on the first day of the series, if we are able to hold the 24,000 level for the next two trading sessions, yes, there could be more buying action that we could see. market. It is also possible that Nifty may try to cross or negotiate the previous resistance zone of 24,350 to 24,400 which is the current challenging level for Nifty. If Nifty crosses 24,400 then yes confidence will return to the street and then again fresh buying action we can see in the market and possible rally may extend to 24,600-24,700 zone as well.
But from a near-term perspective, it will only remain in range. Nifty based on call put concentration where we are looking at the range is 23,900 on the downside and 24,400 on the upside. This could be the likely range for the next two weeks, breakouts on either side will determine the main direction for the market from here on out. For Bank Nifty also we have just managed to close above the 52,000 level, but still if we look at the data, Bank Nifty is still struggling to cross the 52,200, 52,300 zone which is currently key for near term perspective. There is a supply zone. . If Bank Nifty crosses 52,300, we can witness and then the rally can extend to 52,600 to 52,800 type levels.
On the downside, key support for the range is placed at 51,800 for a near-term perspective. So, as long as the Bank Nifty holds 51,800, there is likely to be a bias on the bullish side and a small dip should be used as a buying opportunity at this point as some largecap banks are trying to give a breakout, like ICICI Bank, HDFC Bank. , or SBI these stocks are in our focus. So, here is also a possibility that Bank Nifty may try to breakout on the higher side, so buy-on-dips is the strategy for Bank Nifty.
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Take a look at the week-to-date movement of Nifty. That’s a move of around 1%, but Nifty Midcap is up 2.5% and Nifty Smallcap is having a field day if you can call it a 5% gain during the week just coming on a weekly basis. Do you think there is more security and more confidence among investors in the broader market now or will you continue to believe that largecaps will be your safe bet going forward?
If we analyze the recent market behavior, the broader market has been showing good buying interest and we have seen a similar recovery in the Nifty Midcap as well as the Smallcap space. So, as a benchmark index, Nifty is still stuck in a range. But if we analyze the broader market it is showing a different picture and as most of the midcap and smallcap stocks have gone up, we believe that if it maintains the 24,000-type level for Nifty, the Nifty Midcap and Smallcap universe. Outperform is likely and we may see a stock specific action. If we analyze the Friday session, recovery was seen in chemical stocks, fertilizer stocks, sugar stocks, railways, defense stocks. Hence, stock specific and sector specific momentum continues, but Nifty may remain in consolidation, while midcap and smallcap space may outperform in the coming week.
Given the trend of the December season, where small caps have historically outperformed with an average return of 3%, and indications that small and midcaps may continue to outperform largecaps, looking at the October and November seasons, how much do we know about the broader market performance? Be optimistic. play?
If we analyze the last 10 to 20 years then from the seasonality perspective also Nifty is bullish for the month of December. Most of the time, we generally see that Nifty has given positive returns and we have seen around 10% correction in Nifty in last two months. So, the broader market has already corrected and some recovery and relief rally is already underway in the market as Nifty is comfortably above 24,000 level and Bank Nifty is able to maintain above its near term moving average. So, some buying interest and some confidence is coming back to the street and yes, Nifty Midcap as well as Smallcap may outperform for the month of December. The December series also seems to be close on the positive side. We can register a slight positive gain for the December series. Therefore, we are keeping our bullish view at the moment.
As long as Nifty holds above 23,800, 23,900 zone, Nifty is likely to try to breakout above 24,400 and we can see a positive close for December as well.
Help us understand some of your recommendations for the coming week.
I am focusing on three stock ideas. Bata India is the first stock. We have seen a strong recovery in the stock in the last two days. The stock is holding comfortably above the 20-day, 50-day moving average. There is a long buildup in Friday’s derivatives data. We believe Bata India can up its game. 1480 is the target where we are focusing for the stock, keep your stop loss around 1375.
Another stock from the pharma space is Lorus Labs. We saw a clear outperformance in this stock. Here we can see the stock moving in a higher top, higher bottom formation and the way the stock is bullish in all-time frames. There was very strong buying action in the last two weeks. We believe Laurus Lab can extend its benefits. 600 is the next target where we are focusing, buyable with a stop loss of 555.
The third stock is GNFC. Friday was the sixth day in a row that the stock was making higher lows, clearly indicating that the stock is being overbought. Most of the fertilizer and chemical stocks have performed well in the Friday session. So, GNFC can be seen to buy, 665 is the near term target, can be bought with a stop loss of 620.
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