Indian Equity Markets Set for Bullish Start
The Indian stock market appears ready to begin Tuesday's trading session on a positive note, taking direction from encouraging global market signals. Gift Nifty trends are pointing toward an optimistic opening for the country's primary equity benchmark indices, specifically the Nifty 50 and the Sensex.
This anticipated upward movement follows Monday's trading, which saw the Indian equity markets break a three-session losing streak and finish in positive territory. The benchmark Nifty 50 managed to secure a position above the significant 25,500 level, marking a notable recovery.
Previous Session Performance and Technical Outlook
During the last trading day, the Sensex climbed 319.07 points, representing a gain of 0.38%, to conclude at 83,535.35. Simultaneously, the Nifty 50 increased by 82.05 points, or 0.32%, settling at 25,574.35.
Chandan Taparia, Head of Derivatives & Technicals at Motilal Oswal Financial Services Ltd, provided insight into the Nifty options landscape. He noted that the maximum Call Open Interest (OI) is positioned at the 25,700 strike, followed by the 25,600 strike. Conversely, the maximum Put OI resides at the 25,600 strike, then the 25,500 strike.
Taparia observed, "Call writing is visible at the 25,650 and then 25,700 strikes, while Put writing is occurring at the 25,600 and 25,500 strikes. The options data indicates a wider potential trading band between 25,100 and 26,000, with a more immediate range likely between 25,400 and 25,800 levels."
Nifty 50 and Bank Nifty Analysis
On the daily chart, the Nifty 50 formed a bullish candlestick pattern, effectively interrupting the pattern of lower highs and lower lows that had characterized the previous six trading sessions. For the current positive momentum to persist, the index must maintain its position above the 25,500 zone. If it holds, the next targets are 25,650, followed by 25,800. Support levels are identified at 25,450 and then 25,300.
The Bank Nifty index advanced by 60.75 points (0.10%) on Monday, closing at 57,937.55. This banking sector index is approaching a potential pole and flag breakout. A sustained move above this breakout area could propel the index toward a new all-time high near the 58,577 mark.
Taparia commented on the Bank Nifty's performance, stating, "The index formed a bullish candle on the daily scale and continues to find support around its 20-day exponential moving average (20 DEMA). The rate-sensitive index is showing outperformance, driven by consistent buying interest in major banking stocks. For an upward move toward 58,577 and 59,000 zones, the Bank Nifty needs to stay above the 57,750 support level. Additional downside supports are positioned at 57,750 and 57,500."
Expert Stock Recommendations for Today
Chandan Taparia has issued buy recommendations for three stocks for today's trading session. The recommended stocks are Bharat Heavy Electricals Ltd (BHEL), Muthoot Finance, and Steel Authority of India (SAIL).
BHEL | Buy | Target Price: ₹290 | Stop Loss: ₹264
The share price of BHEL has developed a bullish "Pole & Flag" pattern on its daily chart, suggesting the continuation of its upward trend. The rising ADX line further confirms the strength of the bullish trend. Taparia advises purchasing BHEL shares with a target price of ₹290 per share and recommends setting a stop loss at ₹264.
Muthoot Finance | Buy | Target Price: ₹3,560 | Stop Loss: ₹3,230
Muthoot Finance's stock price has rebounded from its 20 DEMA and is trading close to its all-time high (ATH) levels. The stock is in a general uptrend, with minor price dips being met with buying interest. A bullish crossover in the MACD indicator supports the potential for further upward movement. The recommendation is to buy Muthoot Finance shares with a target of ₹3,560 each and a stop loss at ₹3,230.
SAIL | Buy | Target Price: ₹156 | Stop Loss: ₹138
SAIL shares have broken out from a consolidation phase, accompanied by a substantial bullish candlestick and higher-than-average trading volume. The rising RSI indicator reinforces the positive market sentiment surrounding the stock. Taparia recommends a 'Buy' on SAIL, targeting ₹156, with a stop loss positioned at ₹138.
Disclaimer: The views and investment recommendations expressed are those of individual analysts or brokerage firms and are not endorsed by Mint. Investors are strongly advised to consult with certified financial experts before making any investment decisions.
