Indian stock market: On Monday, August 26, the Indian stock market experienced significant gains, with the Nifty 50 and the Sensex rising nearly 1 percent each. This boost came as investors responded positively to US Fed Chair Jerome Powell’s speech at the Jackson Hole conference last Friday.
“Nifty Index opened gap up and headed towards 25043 levels in the first half of the session followed by consolidation for the rest part of the day. It formed a bullish candle on daily frame with long lower shadow indicating quick absorption at any minor decline and closed with gains of around 190 points. Now it has to continue to hold above 25000 zones for an up move towards 25150 then 25250 levels while support is seen at 24850 then 24750 zones,” said Chandan Taparia, Head – Equity Derivatives and Technicals, Broking and Distribution, MOFSL.
India VIX was up by 1.33% from 13.50 to 13.73 levels. Volatility slightly rose after cooling off from the last two weeks but is overall hovering at lower zones and supporting the bulls to buy at higher zones.
On option front, Maximum Call OI is at 26000 then 25500 strike while Maximum Put OI is at 25000 then 24000 strike. Call writing is seen at 26100 then 25500 strike while Put writing is seen at 25000 then 24900 strike. Option data suggests a broader trading range in between 24600 to 25500 zones while an immediate range between 24800 to 25300 levels.
Bank Nifty
On the Bank Nifty outlook, Taparia further added, “Bank Nifty Index opened on a positive note and gradually extended the momentum towards 51300 zones in the first half of the session. Later it remained consolidative at higher zones in between 51100 to 51300 levels and formed a small bodied candle on daily scale as it ended with gains of around 200 points near 51150 levels. Now it has to continue to hold above 51000 zones for an up move towards 51350 then 51500 levels while on the downside support is seen at 50800 then 50650 zones.”
Chandan Taparia has recommended three stocks to buy tomorrow, August 27. According to him, these stocks – HCL Tech, National Alum, Indian Hotels – are technically placed to see a decent upmove.
Stocks to buy
HCL Tech: Buy at ₹1719 | Target Price: ₹1820 | Stop Loss: ₹1670
A Pole and Flag pattern with a breakout has appeared on the daily scale with high buying volumes to support the up move. The ADX Iine has turned up and the positive DI is above the negative DI indicating the bullish trend has strength to support it.
National Alum: Buy at ₹181 | Target Price: ₹195 | Stop Loss: ₹175
After Retesting its support price has been inching up which suggests a trend reversal with the bullish opening gap up to support the up move. The MACD Line has crossed above the signal line from below and has turned up indicating bullish momentum.
Indian Hotels: Buy at ₹661 | Target Price: ₹700 | Stop Loss: ₹640
Price has broken out of symmetrical triangle pattern with higher than average buying volumes on the and daily time frame. The Relative Strength Index which measures the momentum of a stock has turned up from the centreline which indicates the stock has space to move up.
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
