Indexes reach new highs on renewed vigor; the uptrend may persist

Nifty, Bank Nifty and the broader markets in general are at a new all-time high, and we maintain our bullish stance and believe markets will only break higher levels on the upside.

If you see, we’ve seen a big upward movement in stocks across all sectors and industries.

IT, FMCGs and especially the banking sector have outperformed over the past week.

Nifty & Bank Nifty Perspectives:

Both Nifty and Bank Nifty have performed well over the past week and we expect the bullish sentiment and trend to continue.

Both Nifty and Bank Nifty have strong support areas near the 17,400 and 37,000 levels, further strengthening the case for a bullish week ahead.

Super FMCG:

The FMCG sector has steadily strengthened over the past 6-8 weeks now, this shows how investors are flocking to this sector in times of strained valuations and so much uncertainty. We expect the bullish sentiment and trend to continue in this area.

Much like the FMCG sector, the IT sector has also seen exceptional returns over the past 6-10 weeks and hit a new all-time high.

NIFTY Pharma & Nifty Auto

Just like last week, we are maintaining a slightly bearish position on these two indices as the charts look weak.

Derived perspectives:

The clever future of the current month closed with a 2-point bonus in its place. The future of next month is trading at a premium of 28 points.

We saw an addition of open interest of almost 1.20% in Nifty and given the price movement this clearly points to strong buying during the week.

Long training

The following actions saw the OI build up with a corresponding increase in price, suggesting bullish sentiment

Short training

The following actions saw the OI build up with a corresponding drop in price, suggesting bearish sentiment

Top 5 recommendations for next week

Escorts

ESCORT had given the breakout of the two previous significant resistance levels on September 14, 21. After the breakout it has now returned to its support level which can be a good opportunity to go long.

Addiction

Reliance is trading near its previous resistance level which will now serve as strong support. It is therefore a good opportunity to initiate a long position.

CIPLA

Cipla has consolidated after experiencing a breakout for some time now. It is around its support levels that suggests a good positive momentum is possible from here.

Colpal

COLPAL is in the consolidation zone after a good move from previous support levels. Any sustained move above the 1755 levels will have a good buying opportunity.

TECH MAHINDRA

TECHM is in the strong uptrend. After a good rally, it is trading in the consolidation zone. If there is a lasting break above the consolidation zone, we could see another bullish rally.

(Gaurav Udani is Founder and CEO of Thincredblu Securities. He tweets @Udanii)

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Posted on: Saturday September 18, 2021 13:20 IST

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