Foram M Chheda provides insights into the market’s outlook for the upcoming week, focusing on Nifty and Bank Nifty indices. She emphasizes the critical significance of the 19,600 level for Nifty, considering it both a psychological benchmark and a key technical level. While a rebound is expected, there is also a possibility of profit booking in the second half of the week.
Chheda advises a cautious approach for the upcoming week due to market volatility and suggests maintaining tight stop-loss orders to manage risks effectively. She highlights the support level at 19,500 on an intraday basis and underscores the importance of closing above 19,600 to establish a bullish momentum or enter a sideways trading range.
Turning to Bank Nifty, she notes that it has underperformed compared to Nifty and recently breached its 100-day moving average. Support levels for Bank Nifty are situated around 44,200, with a relatively tight trading range of 700 points. As a result, Chheda anticipates a week of consolidation in this sector.
Chheda also discusses the auto sector, expecting positive sales data for September, which could have a favorable impact on auto stocks. She observes that the CNX Auto Index has been following a bullish trend, characterized by higher highs and higher lows. However, she cautions that a retracement may occur, presenting potential buying opportunities once the index approaches the 15,600 to 15,700 range.
In the banking sector, Chheda expresses a preference for PSU banks, which have outperformed their private sector counterparts. She highlights PNB and Bank of India as promising stocks within the PSU banking space. Regarding HDFC Bank, she advises investors to wait for a weekly closing above 1550 to consider a potential turnaround, although the overall trend remains under pressure.
Chheda points out the stellar performance of the Nifty Pharma Index, which recently demonstrated a 3% increase. She predicts further upside momentum, especially from a longer-term perspective. However, on a shorter-term basis, she expects some resistance due to recent consolidation. The Nifty Pharma Index currently stands at 15,422, with a potential target of around 15,700 once it breaks through on a weekly closing basis.
Finally, Chheda recommends Sun Pharma as a potential buy, noting its alignment with the Nifty Pharma Index’s movements. She suggests that investors consider buying at current levels and maintaining a stop loss below 1125, with a higher target of around 1200.
To summarize, Foram M Chheda advises a cautious approach for the upcoming week, stresses the importance of monitoring support and resistance levels, and identifies potential buying opportunities in specific stocks based on technical analysis.