Nifty to reach 18350 levels in coming days; buy these two stocks to pocket short-term gains | The Financial Express

Nifty to reach 18350 levels in coming days; buy these two stocks to pocket short-term gains

Nifty has been consolidating around the 17800 zone for last 4 trading sessions after witnessing a sharp up move of more than 800 points in 8 sessions.

Nifty to reach 18350 levels in coming days; buy these two stocks to pocket short-term gains
Strong traction in ongoing domestic earnings, Nifty to reach 18000/18350 levels over the next few days

By Rahul Shah

Nifty gained 1.20% in the four trading sessions building on the gains of the previous week to close at 17787. Strong quarterly announced by PSUs and private banks like Bank Nifty to nearly record high of above 41k levels. Auto stocks gained ahead of October monthly sales data to be announced this week and Maruti announced impressive Q2 results. Metal stock gained due to fall in US Dollar Index and hope of improve Eurozone demand after formation of new UK government. Rally in the Global markets, strong FIIs buying interest, better-than-expected quarterly results, and strong sales growth of all segments in the festival sessions boosted market sentiment. 

This week will be important not only for India but also across the global markets. US Fed Interest rate decision, Bank of England rate decision, globally PMI data, US Non-farm payroll data, RBI called for an additional meeting of its Monetary Policy Committee and local October auto monthly sales data will be focus for next week. In the global market front, US Fed to announce its interest rate decision on 2nd November, Bank of England rate decision on 3rd November while RBI’s MPC meeting will be held on 3rd November. Expectation that the US Fed would hike interest rate by 75bps, has already factored in the market. However, US Fed commentary will be important for the global markets sentiment and India is not out of the world. 

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Markets hope that the US Fed chairmen to cool down its statement as previously US Fed officials statement were ultra-hawkish (previously aggressive stance on rate hike on 2023 and 2024). The reasons behind that the US economy data reported in the last few days on weakness (Manufacturing, Job data etc) which indicated that the US Fed may less aggressive stance to hike in interest rate in the current year and subsequent year.  On the other hand, third quarterly  US GDP number registered growth of 2.6% which is much ahead of expectation. As a results, most of the global market witnessed smart rally after reported strong US GDP print and hope of US economy will be back in track despite mixed of quarterly results announcement (Apple, Amazon announced poor guidance).

US Dollar Index fell to a nearly 2-month low at below 110, fall in US volatility Index (CBOE) and US 10-Year Yield corrected to below 4%, implies US Fed pace of interest rate hike is likely to gradually decline. Other major development globally that the Bank of Japan kept monetary policy unchanged, its ultra-low rates even as other central banks are tightening while ECB hiked interest rate by 75bps to 1.50%.

In the domestic market front, RBI surprised announced MPC meeting on 3rd November which is a big question mark by domestic investors. Markets are thinking that the RBI may announce interest rate hike to tackle inflation after October Inflation spiked to 7% levels. However, positive factor that the strong quarterly results announced by Indian corporates, FIIs nearly Rs 4000 crore net buyers just four trading sessions and India Vix fell to 4-month low to below 16 are big advantages in Indian bourse. The Indian rupee also posted a weekly rise on bets that the U.S. Federal Reserve will pivot to smaller-sized rate hikes from December.
 
Nifty has been consolidating around the 17800 zone for last 4 trading sessions after witnessing a sharp up move of more than 800 points in 8 sessions. Strong traction in ongoing domestic earnings, Nifty to reach 18000/18350 levels over the next few days.

Ambuja Cements
CMP: Rs 520 | SL: Rs 512 | Target: Rs 550

Ambuja Cement has formed a base near the 20 DEMA and has surpassed the falling resistance trend line and given a breakout of the consolidation zone. It has formed a strong bullish candle on the daily scale with rising volumes which indicates buying interest. RSI oscillator is also positively placed on daily and weekly charts which will take the prices higher. Considering the current chart structure, we advise traders to buy the stock for upmove towards 550 with stop loss of 512

Also Read: Share Market LIVE: Nifty tops 17950, Sensex jumps 500 pts as bulls pace D-St; Infosys leads gains

PNB
CMP: Rs 42 | SL: Rs 41.5 | Target: Rs 47

PNB has been trading on upper range, stock has given a breakout with volumes. PSU banking stocks have been outperforming since last one month, Stock is near its 52 week high. In derivatives also we have seen massive long built up. Considering the chart structure, we advise traders to buy PNB with a stoploss of 41.5 and target of 47.

(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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First published on: 31-10-2022 at 10:29 IST