1) All the big events like Budget, Fed and RBI policies are behind us. The Q3 earnings season will also come to an end next week and Nifty ended this week on a flat note on the weekly scale. Do you see a direction emerging ahead in the days to come?
This data vacuum presents an opportunity for a time correction. But our modest objectives of 22240-22450/550 continues to be in play though, along with an optimistic target of 22800-23000. But any prospects of potential delay in the onset of rate cuts, could jolt the ride, but may not be enough trigger a collapse per se. We will have our downside marker at the 20d sma now near 21700, a close below which we could see the time correction in play, with bottom range seen as 20800.
2) Nifty Bank and Nifty PSU Bank indices exhibited opposite trends. Do you see a pause in the PSU bank rally?
The divergence in the performance of Nifty Bank and Nifty PSU Bank can be attributed to the obvious fact that Nifty Bank is dominated by private sector banks which has been having a tough time. Incidentally, while PSU bank index is near record peak, Private bank index is over 8% below record peak. This outperformance is probably the reason why Friday saw a profit booking spree that spread to other public sector enterprises too. And yet, the pull back towards close underscores the roaring bull market that the PSU stocks are in. Directional moving indicators are however suggesting that we are peaking, but an outright collapse is less expected, with favoured view expecting a side ways trend with a moderate incline for a while.
3) Looking at the rally in oil and gas as well as other energy stocks, what are the charts indicating ahead? Which stocks would be on your radar to ride the momentum?
Oil marketing companies have run up so much in the past week, but the trend still remains strong with with average daily and monthly RSI above 80. Fresh positions are less encouraged though, as we anticipate higher volatility. We would look for opportunities in gas segment. Stocks like Gujgasltd, Gail, ATGL and Petronet are showing strength with most of them showing positive breakout in monthly time frame. Their average RSI is 63 which is favoring more upsides in the near term.
4) The rally in YES Bank shares have left its lakhs of shareholders excited. What are the targets now?
This rally has been accompanied by record volumes through the week, which is noteworthy, and has probably pushed the stock into a new trading phase. That it has closed above the peak seen in 2022 before a collapse, during which phase a similarly high volumes were also seen, encourages us to persist with the positive construct. Our projected targets are in the 37-46 band for next few weeks. Downside marker may be placed at 25.
5) Give us your top ideas for the week.
BHARATFORG (CMP: 1314)
View : Buy
Targets : 1360 – 1400
Stoploss : 1255
The stock has been on an upside since 2020 and has been making higher tops and higher bottoms since then. It has seen a Supertrend breakout on daily charts painting a bullish picture in the near term. Also, it has broken above the horizontal resistance of 1300 on a closing basis recently. We expect the stock to move towards 1360 and 1400 in the next few weeks. All longs may be protected with stoploss placed below 1255.
First published in The Economic Times