Stock Market News: On Tuesday's session, the domestic benchmark indices, Nifty 50 and Sensex, stabilised near their all-time highs on Tuesday, following the previous day's record-breaking performance. Investors are closely monitoring a range of data releases in order to gauge the potential impact on US interest rate cuts.
While the Sensex started 0.1% down at 82,513.7, the Nifty 50 remained relatively constant at 25,269.71 points. Up to Monday, the Nifty 50 index had upward sessions for thirteen straight days. In the previous session, both benchmarks reached all-time highs.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, predicts that the market correction is necessary since the Nifty 50's record-breaking winning streak is about to come to an end. However, there are no signs of impending collapse or catalysts for a breakthrough.
According to Vijayakumar, there are now two distinct market trends: first, there is a positive trend in the secondary market as high-quality equities are being acquired and rising in value.The other trend is the completely illogical actions in the SME initial public offering (IPO) market, where a lot of SMEs with questionable backgrounds are having their IPOs repeatedly oversubscribed and the stocks are being manipulated and pushed to higher levels for days after listing.
Nifty 50 started the first trading session of the month marginally positive, but the index consolidated within a narrow range and ended just below 25,300 mark.
Nifty 50 continued its move higher to mark a new record above 25,300, with outperformance led by some of the FMCG stocks. The positive trend persists without any indication of a turnaround. The market breadth slightly shifted to the negative, which is the only worrisome sign, indicating profit-taking in specific stocks.
There has been a significant transfer of index futures long positions by FIIs from the August to September series, which indicates a favourable trend. The RSI oscillator continues to show positive momentum on the daily chart, but it is slightly overbought on the shorter time frame charts. To counteract the overbought conditions on the shorter time frames, we may experience some periods of consolidation or minor downturns, which should be considered as chances to buy.
The short term supports for Nifty 50 are placed around 25,110 and 24,920 and any dips towards these supports could see buying interest in the index. Hence, traders are advised to trade with a positive bias and look for stock specific opportunities, while any dips in the index should be seen as a buying opportunity. On the higher side, the index has potential to rally towards 25,400-25,500 in the near term.
On stocks in focus on Tuesday, Ruchit Jain recommends Jio Financial Services Ltd, and Aditya Birla Capital Ltd.
The stock has given a breakout from a falling trendline resistance and has also surpassed its crucial short term moving average hurdles. The volumes are good on breakout and the RSI oscillator is hinting at a positive momentum. Hence, short term traders are advised to buy the stock in the range of ₹345-340 for potential targets of ₹365 and ₹378. The stoploss on long positions should be placed below ₹326.
The stock has recently gone through a corrective phase, but the prices have managed to form a support base around the previous swing low support of Rs. 200 and have showing signs of a resumption of the uptrend. The RSI oscillator on the daily chart has given a positive crossover and hence, we advise short term traders to look for buying opportunities in the stock.
Traders can buy the stock in the range of ₹225-220 for potential target of ₹240 and ₹252. The stop loss on long positions should be placed below ₹211.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
