Home Supporting structure Buy these two stocks for short term gains, charts show strength; Nifty must hold above 17550, buy dips

Buy these two stocks for short term gains, charts show strength; Nifty must hold above 17550, buy dips


By Rahul Shah

FII bought nearly Rs 54,000 crore (including primary markets) on Aug 22, their highest since Jan 21. The DIIs, however, became sellers after 17 months and sold for around Rs 7,000 crore. Economic indicators supporting the rally, the price of oil fell to its lowest level in 7 months, strong buying interest from FII, an announcement of impressive quarterly results and strong PMI data. Even the banking system is enjoying a healthy recovery with systemic loan growth peaking at 15.3% YoY recently. The last time systemic lending grew by around 15.3% year-on-year was in November 2013.

Also Read: Nifty Support Seen Near 20-Bar Moving Average; buy and sell these two stocks to pocket gains

We expect northbound travel to continue on Indian exchanges, not only due to strong domestic factors, but also due to global indices. Global markets climbed 1-2% from the previous week’s close (the Dow’s best weekly performance since late July) despite continued tough talks from Fed members and a massive interest rate hike from the ECB (75 bps at 1.50%). This means that investors have already priced in the US Fed to aggressively raise interest rates as market watchers expect a 0.50 basis point increase – a 75 basis point increase in the benchmark lending rate – which will now be held in September. valuations with the S&P 500 trading around 16.8x forward earnings, below the average of 17.2x over the past decade.

The Cboe Volatility Index, also known as the VIX, fell below 23 after nearly hitting 28 earlier in the week and the dollar index fell to 109 from its recent high of 111. This means that the volatility in the global market will subside and the markets are looking for earnings and the latest economic data. The United States, China, Europe, Australia and India will announce CPI and IPI data next week.

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Back home, expect the rally to continue in the domestic market due to a strong macro macro, continued buying interest from FIIs and the price of oil falling to an all-time low. in 7 months. Sensex gained nearly 1,000 points or 2%, the biggest weekly gain since July. Better than expected quarterly earnings along with strong PMI data and an above normal monsoon will be very positive in local stock markets. FII have been strong net buyers above Rs6000cr this week, while Sensex posted an intraday high of over 60,000 this week. Indian markets are expected to continue their ascent and any dip will be a good buying opportunity

Nifty formed an inside bar on the daily time frame, but a bullish candle on a weekly time frame with a long upper shadow. Now it needs to hold above the 17550 areas, for a bullish move towards the 17667 and 17777 areas while support is placed at the 17442 and 17350 areas.

State Bank of India (target: Rs 590)

The State Bank of India broke above the lower supply trendline on a weekly scale and is in line with the 20-week average indicating the strength of the meter. SBI has formed a strong weekly bullish engulfing candle pattern and follow-up buying is visible. The RSI oscillator is also placed positively on the weekly and monthly charts and the supports are gradually moving upwards. Looking at the overall price structure, we expect the stock to rise slightly towards 590.

Oberoi Realty (Target: Rs 1,100)

Oberoi Realty gave a consolidation break on the weekly scale and formed a strong bullish candle. On the monthly scale, it is reaching higher highs since the last 3 months and the supports are gradually moving upwards. The RSI oscillator is placed positively, which will support the move to higher levels. Looking at the overall price structure, we expect the stock to edge up towards 1100 zones.

(Rahul Shah is Senior Vice President, Group Advisory Leader-PCG, Broking & Distribution, Motilal Oswal Financial Services. Opinions expressed are those of the author.)