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Expert’s Outlook: Nifty’s trajectory, Expiry Day Shifts, and Top Stock Picks
Table of Contents
- Expert’s Outlook: Nifty’s trajectory, Expiry Day Shifts, and Top Stock Picks
Analysis from LKP Securities on market trends and stock recommendations.
Analysts at LKP Securities suggest Nifty is maintaining its short-term climb as long as it stays above 24,800, with potential to reach 25,000-25,250. While Bank Nifty is showing weakness, they are highlighting One MINDA and Lupin as potentially strong stocks for the week, while suggesting a sell position on Axis Bank.
nifty’s Recent Performance and Outlook
After a six-day winning streak, nifty paused, which analysts interpret as a temporary break before continuing its upward movement. The index has remained above the 50-day Exponential Moving Average (EMA), confirming a short-term uptrend. Support is set at 24,800; as long as it remains above this, the trend is expected to stay strong, potentially rising to 25,000/25,250.
“Provided that it holds above this level, the trend is highly likely to remain strong with potential to rise towards 25,000/25,250.”
Bank Nifty’s Underperformance
Bank Nifty is not performing as well as Nifty, showing a weaker trend during the week. The index has fallen below its recent consolidation on the daily chart and has slipped under the 50 EMA. On the weekly chart, it has moved towards the 20 EMA, where it is expected to find support and attempt a reversal. However, should it drop below 54,950, it could fall further towards 54,500. Resistance is at 55,500, and sentiment is likely to remain weak if the index stays below this level.
Impact of SEBI’s Jane Street order and Expiry Day Swap
As the Securities and Exchange Board of India’s (SEBI) order regarding Jane Street, the market has seen an impact on Futures and Options (F&O) volumes, especially on expiry days. Volumes initially dropped sharply by about 30% following the ban. While they have recovered somewhat, they have not returned to levels seen before the order. A negative impact on volumes may continue in the short term.However, increased participation could drive higher volumes in the long run as traders use both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) expiries.
Adjusting Nifty Trading Strategies for Tuesday Expiries
The shift to tuesday expiries will require adjustments to Nifty options trading strategies. The initial weeks may be challenging as traders adapt to the new cycle. Option premiums are likely to see the most notable time decay between Friday and Monday, making Mondays more active. consequently, mondays will become crucial for Nifty option traders, with positions being actively reviewed or new trades initiated before Tuesday’s expiry.
Ola’s Stock Performance
Ola shares were among the top gainers recently. However, on the weekly chart, Ola has not closed above the 20-day EMA, which is a slightly negative sign for its price trend. if the stock rises above 48 early in the next week,it might move towards 54/56. Support is placed at 46.60.
Top Stock Ideas for the Week Ahead
Buy UNO Minda at ₹1266 | Target: ₹1330 | Stop Loss: ₹1219
UNO Minda’s stock has risen after a brief consolidation,signaling renewed optimism. It is trading above the 50 EMA,confirming a bullish trend,and the relative Strength Index (RSI) has entered a bullish crossover after the breakout. The trend is expected to remain positive in the near term, with potential upside towards 1,330. support is at 1,219.
Buy Lupin at ₹1970 | Target: ₹2050 | Stop Loss: ₹1924
Following a bullish harami pattern, Lupin’s stock has moved higher, indicating a bullish reversal.The price has been sustaining above the 50 EMA, and the RSI is in a bullish crossover. In the short term,the stock might move towards 2030-2050. Support is placed at 1924.
Sell Axis Bank at ₹1070 | Target: ₹1040 | Stop Loss: ₹1086
Axis Bank’s stock has declined from its recent consolidation, suggesting growing bearish sentiment. It has been trading below the 21 EMA on the daily timeframe, and the RSI is on the verge of a bearish crossover.In the short term, the stock may drift lower towards 1,040, with resistance at 1,086.
Frequently Asked Questions
- What is the importance of the 50 EMA?
- The 50-day Exponential Moving Average (EMA) is a technical indicator that shows the average price over the past 50 days, giving more weight to recent prices. It’s used to identify the direction of a trend.
- What does a bullish harami pattern indicate?
- A bullish harami is a candlestick pattern that suggests a potential reversal of a downtrend. It consists of a large bearish candlestick followed by a smaller bullish candlestick whose body is contained within the body of the previous candlestick.
- What is the RSI and how is it used?
- The Relative Strength Index (RSI) is a momentum indicator used to measure the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset.An RSI above 70 is frequently enough considered overbought, while an RSI below 30 is considered oversold.
