Nifty ended the third consecutive week with a loss. Do you think a bottom has been formed in the market? What are the key support levels to watch out for?What was on display on Friday was traders adopting a risk-on approach, feasting on the bargains available as Nifty slipped below the recent low in opening trades and sunk to the lowest since late August. Post the upswing that followed, 44% of the Nifty 50 constituents are now trading above their respective 10 day SMAs, which is indeed a sign of resilience. This figure is the highest since 1st of October 2024. But, this recovery is yet to become broad based, as Nfity500 and SMIDs continue to lag. We shall hence pin our hopes on fast stochastics signalling a bottom formation, while seeking a confirmation from a push back above 24950. Towards this end, we retain our last week’s view of 25390. Downside marker meanwhile would be at 24770, with supports below seen at 24470 and 23900.
Nifty Bank got support from the earnings season. Are charts signaling more upside potential?Since majority of Nifty Bank constituents are yet to announce their figures, traders appeared more inclined to take a risk-on approach, especially since we are coming off a low base. So the earnings flow provides a tailwind for now, but could emerge as a source of volatility as well as the week progresses. Incidentally Nifty Bank had corrected 7.8%, from September peaks, as opposed to Nifty’s 6.5%. Though the 20-day SMA at 52375 could pose some challenge to Nifty Bank’s ascent, we are counting on the oscillator divergences as well as Friday’s bullish engulfing pattern to provide enough momentum to see 53000.Stocks of brokers like Motilal Oswal and Angel One have been on an uptrend and were among the biggest gainers in the week. Are they overheated now?Though both are of the same sector, their uptrends are running very differently on charts. While both can continue in one’s portfolio, Angel One presents a bigger risk reward in the short term, given it is on a recovery path. Downside markers may be placed near 2800.Manappuram Finance ended Friday’s session 17.5% lower after RBI’s action against subsidiary Asirvad Microfinance. Do you fear chances of more downside in Monday’s trade?Manappuram has been on weak grounds since July. Given such an extended period of sluggishness, we may actually be seeing a slow down in bearish momentum, though it is fair to expect some more follow through down moves, given the steepness of Friday’s fall. While we expect such downsides to be limited to Rs 133, recovery attempts may find it difficult to get past Rs 169 right away. Sector wise, NBFCs still appear weak on charts, but an expected firmness in banks could lend some positivity.
Give us your top trading ideas for the week ahead?PIDILITIND (3184)BuyTarget – 3465SL – 3054
The stock has been moving within a rising trend channel since October 2023 and came off the channel resistance in September 2024. It is attempting a bounce back from the channel support of 3114. It has also seen a Psar break in the daily time frame as well hinting at positivity in the near term. We expect the stock to move towards 3465 in the near term. All longs may be protected with stop loss placed below 3054 levels.
PVRINOX (1610)BuyTarget – 1795SL – 1546
The stock has been in a wedge pattern since late 2022 and seems to be attempting a breakout on the upside. Apart from that, price has broken above the monthly PSar value and the stock has bounced off the daily rising trendline support of 1550 recently hinting at short term positivity. We expect the stock to move towards 1795 in the next few weeks. All longs may be protected with stoploss placed below 1546.
