Nifty may slip below 17400, resistance at 17777; buy these two stocks to pocket short-term gains | The Financial Express

Nifty may slip below 17400, resistance at 17777; buy these two stocks to pocket short-term gains

Till Nifty holds below 17777 zones, weakness could be seen towards 17442 and 17250 zones whereas hurdles are placed at 17777 and 17850 zones.

Nifty may slip below 17400, resistance at 17777; buy these two stocks to pocket short-term gains
Nifty has formed a Bearish candle on daily and weekly scale

By Rahul Shah

Equity benchmark Sensex nosedived nearly 1000 pts to close 2-week low at below 59000 mark amid rising volatility in global markets ahead of the Fed’s interest rate decision next week and expectation of US Fed to aggressively hike interest rate next week. Markets were mainly dragged by a sharp fall in technology and automobile stocks following a broader global selloff over recession worries. Investors lost over Rs6lakh during the week. However, banking stocks relatively outperformer compare to the other sectors and gained 1% against the previous week close. Bank Nifty touched record high at 41840.  On a weekly basis, the Sensex shed 952 points or 1.60 per cent to close at 58841, while the Nifty nosedived 302 points or 1.70 per cent to close at 17531.   

Week global markets, concern of higher than US Fed rate hike, lower than expected GDP data for Q1 of FY23 and rating agency Fitch earlier this week cut India’s GDP growth forecast for the current fiscal year to 7% from 7.8% have negative impact in the market. India Vix climbed up by 10% to close 1-month high at nearly 20 which indicated higher volatility in the domestic market.  Across the global market declined sharply between 3-5% amid concern of US Fed to aggressively hike interest rate on the next week policy meeting (21st Sept).

Also Read: Rupee likely to depreciate on strong dollar, risk aversion in markets; USDINR pair may trade in this range

As macroeconomic and policy uncertainty remains elevated, further market volatility is expected. US data pointed to robust numbers like retail sales and a strong labor market which is raising expectations of more aggressive action by the Fed as it tries to cool inflation. US 2-Year bond spiked to 15-year high at 3.87% while 10-year bond is hovering at 3.44%, implying a short-term pain to continue in the global markets. Moreover, US Dollar Index surged to multi years high, resulting in sharp decline across the commodity prices (Gold fell to 2-year low, aluminum, copper, oil to 2-7 month low).  Apart from the US rate decision, Bank of England policy decision on 22nd (Thursday) and domestic Logistic policy will be announced today.

Back home, Indian markets is better placed compare to the other global markets due to strong micro factors like better-than-expected PMI data, stable inflation, 7% above normal monsoon, strong government policy implementation and oil price falling to 7-month. Expectation of strong quarterly results after Advance tax in the July-September quarter jumped by 22.6% (YoY) to Rs1.81lakh cr.  However, India Vix spiked to 1-month high at nearly 20 which is indicating higher volatility due to global market volatility.

Nifty – Nifty has formed a Bearish candle on daily and weekly scale. The index wiped off its gains of the entire week and formed a Bearish Engulfing sort of candle on weekly frame. Now, till it holds below 17777 zones, weakness could be seen towards 17442 and 17250 zones whereas hurdles are placed at 17777 and 17850 zones.

Kotak Bank
CMP: Rs 1930| SL: Rs 1885| Target price: Rs 2070

Kotak Bank has formed a strong base and it has given a breakout of the rounding formation with a bullish candle on the daily scale. On the weekly scale, it has surpassed the falling supply trend line and has been sustaining above the same. It is also forming higher highs since last 3 weeks which indicates that the trend is positive. RSI oscillator is also positively placed on daily and weekly charts. Considering the current chart structure, we advise traders to buy the stock on for up move towards Rs 2070 with a stop loss of Rs 1885.

Also Read: ACC, Adani Power, Ambuja Cements, Tata Steel, Paytm, Tata Power, HDFC Life, Indus Towers stocks in focus

Tata Power
CMP: Rs 236| SL: Rs 229| Target: Rs 250

Tata Power has retested breakout on daily chart and turned higher. It has negated lower highs formation after six trading session and formed a Bullish candle indicating strength in the counter. RSI oscillator is also positively placed on daily and weekly charts. Considering the current chart structure, we advise traders to buy the stock for up move towards Rs 250 with a stop loss of Rs 229.

(Rahul Shah is the Senior Vice President, Group Advisory Leader-PCG, Broking & Distribution, Motilal Oswal Financial Services. The views expressed are the author’s own. Please consult your financial advisor before investing)

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