Trade Setup For Sept. 23: Nifty Headed For 26,000 Amid Market's Bullish Momentum
With the index breaking through the 25,500-25,600-resistance zone, a robust bullish structure is indicated, according to analysts.
NSE Nifty 50, which logged gains for a second consecutive week, is likely to touch 26,000 level amid the ongoing bullish momentum in the equity market, analysts said.
"Given the ongoing momentum, there is a possibility that 25,900-26,000 could be considered as potential target levels for Nifty in the upcoming week," said Osho Krishan, senior analyst - technical and derivatives at Angel One Ltd.
Sentiment on the Nifty has shifted "decisively towards the bullish side", supported by heavy put writing and strong buying across broader markets, added Dhupesh Dhameja, technical analyst at SAMCO Securities Pvt.
"With the index closing above previous week highs and breaking through the 25,500-25,600-resistance zone, a robust bullish structure is indicated," he said.
Technically, the index has settled "above the previously formed doji" which indicates strength, explained Hrishikesh Yedve, assistant vice president of technical and derivatives research at Asit C. Mehta Investment Intermediates Ltd.
"Thus, ongoing bullish momentum is like to take Nifty towards 25,900-26,000 levels. On the upside, 26,000 will act as an immediate hurdle for Nifty," Yedve added.
On the downside, 25,500 will serve as an immediate support for Nifty followed by 15-double exponential moving average support, which is placed near 25,300 levels, he said. As long as Nifty stays above 25,600, a "buy on dips" strategy is advisable for traders, the analyst further added.
"For Bank Nifty now, the current market texture is bullish. But due to temporary overbought conditions, we could see range bound activity in the near future," said Amol Athawale, vice president of technical research at Kotak Securities Ltd.
For traders, 53,400-53,000 would be the key support zones while 54500-54700 would act as crucial resistance areas for the bulls, he added.
Major Stocks In News
Adani Total Gas: The company secured funding of $375 million from international lenders to expand its city gas distribution network.
Bharat Heavy Electricals: The company received an order worth Rs 6,100 crore from NTPC for an EPC package for the 1x800 MW Sipat Supercritical Thermal Power Project.
Dr Reddy's: USFDA inspected the Hyderabad R&D centre and closed with zero observations.
Tata Steel: The company successfully commissioned a blast furnace at Kalinganagar, Odisha. The steelmaker would invest Rs 27,000 crore in Kalinganagar's Phase II expansion, increasing the site's overall capacity from 3 MTPA to 8 MTPA.
Ramco Cements: The capacity of the company's cement grinding debottlenecking operations at its Andhra and Tamil Nadu plants has increased from 1.5 MTPA to 2 MTPA and 1.6 MTPA to 2 MTPA, respectively.
Samvardhana Motherson: The company raised Rs 4,938 crore via QIP.
Style Baazar: The company has opened a new store in Dhubri, Assam.
Matrimony.com: The company will launch a new job business called 'ManyJobs' to focus exclusively on the grey-collar jobs market. The company is planning an initial launch for the Tamil Nadu market in both English and Tamil.
Glenmark Pharmaceuticals: USFDA inspected the company's Aurangabad facility and closed with zero observations.
Signature Global: Gaurav Malik resigned as CFO.
Piccadily Agro: The company’s Indri single malt whisky made available at Tesco stores across England.
Mankind Pharma: The company approved raising up to Rs 10,000 crore via NCDs and commercial papers.
Godfrey Phillips India: The company will seek appropriate clarification from the RBI regarding the issue of bonus shares to non-resident shareholders. FDI is currently prohibited to invest in the cigarettes and tobacco products industry.
AstraZeneca Pharma: The company will launch Tremelimubab (Imjudo) concentrate in India in October.
JM Financial: The board approved the appointment of Vishal Kampani as MD for 5 years effective Oct. 1 and approved re-appointment of Adi Patel as MD for 3 years effective Oct. 1.
F&O Cues
The Nifty September futures were up 1.18% to 25,767 at a discount of 23 points, with the open interest up by 5.65%.
The Nifty Bank September futures were up by 0.8% to 53,550 at a discount of 243 points, while its open interest was down by 9%.
The open interest distribution for the Nifty 50 Sept. 26 expiry series indicated most activity at 27,000 call strikes, with 25,000 put strikes having maximum open interest.
For the Bank Nifty options expiry on Sept. 25, the maximum call open interest was at 54,000 and the maximum put open interest was at 52,000.
FII/DII Activity
Overseas investors turned net buyers after a day and bought Rs 14,064 crore worth of Indian equities on Friday, the largest buying from foreign portfolio investors so far this year.
The previous highest single-day buying of equity shares was on June 19, when the FPIs bought stocks worth Rs 7,908.4 crore.
Domestic institutional investors turned net sellers after five days of buying and sold equities worth approximately Rs 4,427 crore, the NSE data showed.
Market Recap
The benchmark equity indices hit new highs in four out of five sessions this week. On Friday, they tracked the gains in the US as well as other Asian markets and recorded fresh closing highs again.
The NSE Nifty 50 ended 375.15 points or 1.48% higher at 25,790.95, while the S&P BSE Sensex closed 1,359.51 points or 1.63% up at 84,544.31.
The Nifty added 1.7% this week and the Sensex jumped 1.99%. Among sectors, Nifty Realty and Nifty Bank were the top gainers, and Nifty Media and Nifty IT fell.
Global Cues
Stocks in the Asia-Pacific region kicked off the week mixed as concerns about the worsening Chinese economy weighed on investors.
However, the focus during the week will shift to the US GDP print to see if the Federal Reserve was late in slashing key rates.
Equity benchmark in Australia led the decline while that of South Korea was marginally higher. Future contracts in Australia, Hong Kong and China point to an early loss at the Monday.
The South Korean Kospi was up 0.3% at 2,602, while Australia's S&P ASX 200 was down 0.7% at 8,157as of 6:02 a.m. The stock market in Japan will be closed for a public holiday.
China's economic concerns deepened on Friday as data showed a decline in government spending and a significant rise in youth unemployment.
The S&P 500 and Nasdaq Composite slipped 0.19% and 0.36%, respectively. The Dow Jones Industrial Average rose by 0.09%.
Brent crude was trading 0.09% higher at $74.56 a barrel as of 5:52 a.m. IST. West Texas Intermediate was up 0.11% at $71.08.
Key Levels
US Dollar Index at 100.79
US 10-year bond yield at 3.74%.
Brent crude up 0.09% at $74.56 per barrel.
Bitcoin was down 0.06% at $63,170.23
Gold spot was down 0.08% at $2,619.82.
Money Market
The Indian rupee closed 12 paise stronger at 83.57 against the US dollar on Friday, up from its previous close of 83.69, according to Bloomberg data.
The currency gained early momentum following the release of US jobless claims data on Thursday, which showed a decline to 2.19 lakh in September, the lowest since May and below the estimated 2.3 lakh claims.
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