Indian stock market benchmark indices, Sensex and Nifty 50, traded higher on Monday led by banks, metals, IT and energy stocks amid positive cues from global markets. Gains were also seen in the broader markets as the midcap and smallcap indices traded higher.
While Nifty 50 was trading above 24,500 level, Bank Nifty was flat around 50,500 level amid selling in private lenders.
On the technical front, the Nifty 50 index formed a small bullish candle with a lower shadow on the weekly chart, indicating a buying support around the 50-day SMA (Simple Moving Average).
“The chart pattern suggests that if Nifty crosses and sustains above the 24,700 level, it could witness buying, leading the index towards 24,850 - 25,000 levels. However, if the index breaks below the 24,450 level, it could witness selling, taking the index towards 24,200 - 24,000 levels. For the week, we expect Nifty to trade in the range of 25,000 - 24,000 with a mixed bias,” Axis Securities said.
The weekly strength indicator RSI continues to remain flat, indicating an absence of strength. However, the momentum oscillator Stochastic has turned negative from the overbought zone, indicating a possible down move in the near term, it added.
Bank Nifty index formed a “Doji” candlestick pattern on the weekly chart, indicating indecisiveness among market participants regarding the direction.
“The chart pattern suggests that if Bank Nifty crosses and sustains above the 50,750 level, it could witness buying, leading the index towards 50,850 - 51,000 levels. However, if the index breaks below the 50,200 level, it could witness selling, taking the index towards 50,000 - 49,800 levels. For the week, we expect Bank Nifty to trade in the range of 51,000 - 49,800 with a negative bias,” Axis Securities said.
The weekly strength indicator RSI is in negative territory and is below its respective reference line, indicating a negative bias, it added.
Axis Securities has recommended four stocks to buy this week based on the technical outlook. These four technical stock picks by Axis Securities are Bajaj Auto, Multi Commodity Exchange of India (MCX), Tata Consultancy Services (TCS) and Barbeque Nation Hospitality.
Bajaj Auto stock has broken out above the symmetrical triangle pattern at ₹9,770 on the weekly chart, indicating a continuation of its medium-term uptrend. The previous resistance at ₹9,250 is now serving as a support zone, in line with the principle of change in polarity, Axis Securities said.
Bajaj Auto shares are positioned above key short and medium-term moving averages of 20, 50, 100, and 200 days, indicating a positive bias. The Weekly RSI strength indicator’s crossover above its reference line has generated a buy signal. The analysis indicates an upside of ₹10,550 - 10,800 levels. The holding period is 3 to 4 weeks, it added.
MCX shares have confirmed a breakout above the medium-term ‘Consolidation’ zone between ₹4,625 - 3,150 levels on the weekly chart with a strong bullish candle, indicating the continuation of the medium-term uptrend. MCX stock continues to form higher highs and higher lows compared to the previous week’s breakout candle, indicating a continuation of the post-breakout uptrend, said the brokerage firm.
MCX share price took support at the 38% Fibonacci retracement level of a rally from ₹1,285 - 4,270 positioned at ₹3,118 confirming a medium-term support base. The Weekly RSI strength indicator is holding above its reference line indicating positive bias. The above analysis indicates an upside of ₹4,920 - 5,100 levels, Axis Securities said.
TCS share price has demonstrated a breakout above the 'Rounded Bottom' pattern in mid-July 2024 at ₹4,233 with a strong bullish candle on the weekly chart, signalling a positive bias. TCS stock experienced a “throwback” around the breakout area and bounced back sharply, indicating a continuation of the post-breakout uptrend. The stock is forming higher highs and higher lows on the weekly chart and holding above the upward-sloping trendline, indicating a positive bias. The Weekly RSI strength indicator is holding above its reference line indicating positive bias, said Axis Securities.
The brokerage firm expects an upside of up to ₹4,656 - 4,750 levels for TCS shares within a holding period of 3 to 4 weeks.
Barbeque Nation Hospitality share price has shown a breakout above the medium-term downward-sloping trendline, established from mid-November 2021 at ₹587 on the weekly chart, signalling the beginning of an uptrend. Barbeque Nation stock has also experienced a breakout above the inverted head and shoulders pattern at ₹601, indicating a reversal of the downtrend. It also closed above a weekly upper Bollinger band generating a medium-term buy signal. The Weekly RSI strength indicator is holding above its reference line indicating positive bias, said the brokerage firm.
It expects Barbeque Nation shares to see an upside of up to ₹690 - 713 levels, with a holding period of 3 to 4 weeks.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
