Nifty Hovering Over 20/50-Day SMA Levels

Mumbai: In the last week, the benchmark indices witnessed a stellar rally as BSE Sensex was up by 3,070 points. Among sectors, all the major sectoral indices traded in positive territory, with the Capital Market and Defense indices gaining the most. The Capital Market rallied by 14 percent, and the Defense index gained over 10 per cent. During the week, the market successfully cleared the short-term resistance of 75,000, and post-breakout, the positive momentum intensified. It also surpassed the 20 and 50-day Simple Moving Averages (SMA), which is largely positive.

Technically, on weekly charts, a long bullish candle has formed, and on daily and intraday charts, it is holding a higher bottom formation, which supports further upward movement from the current levels.

“We are of the view that the short-term market texture is bullish; however, due to temporary overbought conditions, we could see some profit booking at higher levels. For traders, buying on dips and selling on rallies would be the ideal strategy,” says Amol Athawale of Kotak Securities.

In the near future, 75,800 and the 50-day SMA or 75,400 would act as key support zones, while 77,400-78,000 could be the key resistance areas for the bulls. However, if it falls below 75,400, the sentiment could change, and traders may prefer to exit from their long positions.

Prashanth Tapse, senior V-P (research), Mehta Equities says: “Investors shrugged off negative global markets sentiment, as FIIs making a steady comeback to local equities this week coupled with a sharp drop in the domestic currency level provided a major fillip. With the recent fall making stocks attractive across several sectors, including broader mid & small-cap indices, investors continued with short covering, which helped Sensex breach the 77k mark in intra-day trades.”

Also, investors could be squaring off their positions ahead of next week’s monthly F&O expiry, resulting in a sharp rally.

Today, the Indian stock market concluded on a robust note today, with both the BSE Sensex and NSE Nifty50 extending their winning streak. The Sensex surged by 557.45 points, or 0.73%, to close at 76,905.51.

Vaibhav Vidwani, Research Analyst at Bonanza, said that “despite initial cautious trading due to global market volatility and trade tensions, the indices maintained their upward trajectory, supported by domestic consumption themes that are less affected by international trade disputes.”

STOCK PICKS

Canara Bank

Buy | Entry: 87.54 | SL: 85.00 | Target: 92.00

Canara Bank has established strong support around Rs86, indicating stability at lower levels. If the stock moves past Rs89, it could gain momentum towards Rs92. The stock is showing signs of accumulation, with banking stocks continuing to exhibit strength. Rising volumes reinforce a bullish outlook in the near term. A stop loss at Rs85 is advised to manage risk.

Ashok Leyland

Buy | Entry: 210.84 | SL: 205.00 | Target: 225.00

Ashok Leyland is maintaining an uptrend, with strong support near Rs208. The stock has shown resilience, and a breakout above Rs213 could trigger further buying. The auto sector remains strong, which could drive the stock towards Rs225 in the near term. Maintaining a stop loss at Rs205 is recommended to protect against downside risks.

(Source: Riyank Arora, technical analyst at Mehta Equities)