Edited fragments from a chat with the market strategist:
Nifty ended in the Green for the third consecutive week. Given the positive macro background, do you think the positive momentum would continue in the coming week?
Last week’s performance of the goal of 25400-600, along with an evening star candle landing, requires us to seek withdrawal power instead of immediately expanding upward objectives. A lot of resting point is 24880-800. However, if slips do not extend beyond the 25200-25000 region, we might as well see a sideways movement, followed by recovery attempts, although an outright penetration of 25669 is expected less.
How would you read the outperformance of the wider market in the week led by Rally in real estate, defense and PSU bank shares? Is it time to be bullisher on smallcaps?
The recent outperformance in the wider market is mainly driven by Defense and PSU bank stocks. In the coming week, PSU banks are expected to maintain leadership, while Defense shares seem to approach after their strong rally. This step is probably supported by heavyweight voters such as Laurus Labs, Poonawalla Fincorp, MCX, Radico Khaitan, Aster DM Healthcare and CDSL. In addition, small PSU banks such as UCO Bank, Central Bank or India, City Union Bank (CUB), J&K Bank and Karur Vysya Bank can further feed the rally.
If the index successfully breaks above the resistance zone of 19150, it could pave the way for a wider Upmove to 20950, which marks a considerable outbreak in the SmallCap space.
With India Vix at multi-year lows under the 10-marking, what do you think this is a signal about market mood? Can we read it as a signal for a bull run?
A low VIX is a sign that investors feel comfortable with prevailing prices and do not expect large price movements. It is known that VIX has an inverted relationship with Nifty and the decline of VIX has continued so far in September, with Nifty at the same time. The extensive oppression in VIX to register lows, however, also increases the outlook of a change in the expectations of volatility. This event coincides with the approach from Nifty to a significant peak, also increases the risk of a turn. However, there is rarely a sharp shift of low VIX state, as a result of which Nifty should prevent a collapse.
Redington came to the best profit in the week when the sale of iPhone 17 in India started. How would you exchange the shares in the coming days?
The peak of Tuesday helped to break the share price after a consolidation pattern of almost a month and a half. But this has also brought the RSI to Overbought circumstances after he has pushed the prize to the peaks of July. Both the price and RSI would like a period of consolidation. But as long as dips stretch no more than 260, expects bulls to regroup and push the stock to new peaks.
How do you read the momentum we saw in PSU bank shares. Are there names that would be on your tracking list?
The Nifty PSU Bank Index has been consolidating in a downward wedge pattern since July. This week it witnessed an outbreak of the pattern, which indicates a possible trend shift. To support this bullish development, the weekly MacD above the signal line has been exceeded, indicating the reinforcement of the momentum and prefer further upward upward in the short term.
From a derivative perspective, more than 80% of the component shares saw new long positions or experienced short cover on Friday and on week to week. This suggests that market participants in the derivatives segment position themselves for continuous profit.
We expect that the index will go to the level of 7850 in the short term, whereby the rally will probably be led by important shares such as State Bank of India (SIN), Bank of Baroda, Punjab National Bank (PNB), Union Bank, Canara Bank (Canbk) and Bank of India.
Give us your best ideas for the week
LTFoods (CMP: 473)
View: buy
Goal: 489, 515
SL: 449.5
The reversal that started at the end of August continues to show strength, without immediate signs of exhaustion. The price is decided above the super trend level of 435, the strengthening of bullish sentiment. Moreover, the weekly MacD is about to cross above the signal line, which supports positive prospects in the short term.
We expect the stock to go to 489 and possibly 515 in the upcoming sessions. Traders who hold long positions can consider placing a stop-looss under 449.5 to effectively manage risks.
Ajmera (CMP: 1,052)
View: buy
Goal: 1090–1108
SL: 1020
The breakout of the symmetrical triangle earlier this month seems to be in strength, supported by a new consolidation outbreak this week. As an addition to the Bullish Setup, MacD output bars suggest in addition to a strong bullish Marubozu candle candle further upward potential.
We expect that the stock will go to the reach of 1090-1108 (weekly super trend) in the coming sessions. Traders who hold long positions can consider placing a stop-loss under 1020 to protect against unexpected pullbacks.
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