Indian Stock Market: The Indian stock market rose significantly on Monday, August 26, with the Nifty 50 and Sensex gaining nearly 1 percent. The rise came as investors reacted positively to US Fed Chairman Jerome Powell's speech at the Jackson Hole conference last Friday.
“The Nifty index opened gap up and moved towards 25043 levels in the first half of the session, followed by consolidation for the rest of the day. It formed a bullish candle on the daily frame with a long lower shadow, indicating quick absorption of any minor dips and closed with a gain of around 190 points. Now it has to sustain above 25000 zone to move towards 25150 and then 25250 levels, while support is seen at 24850 and then 24750 zones,” said Chandan Tapadia, Head – Equity Derivatives & Technicals, Broking & Distribution, MOFSL.
India VIX rose 1.33% to 13.73 from 13.50. Volatility has increased a bit after declining for the last two weeks but overall it is hovering in the lower zones and helping the bulls to buy in the higher zones.
On the Options front, maximum Call OI is at 26000 and then 25500 strike while maximum Put OI is at 25000 and then 24000 strike. Call writing is seen at 26100 and then 25500 strike while Put writing is seen at 25000 and then 24900 strike. Options data suggests a wider trading range between 24600 to 25500 zone while an immediate range is between 24800 to 25300.
Bank Nifty
On the outlook for Bank Nifty, Taparia further added, “The Bank Nifty index opened on a positive note and moved slowly towards the 51300 zone in the first half of the session. Later it consolidated in the higher zones between 51100 to 51300 and formed a small body candle on the daily scale as it ended with a gain of 200 points near 51150 levels. Now it has to sustain above the 51000 zone to move towards 51350 and then 51500 levels, while on the downside support can be seen at 50800 and then 50650 zones.”
Chandan Tapadia has recommended three stocks to buy tomorrow, August 27. According to him, these stocks – HCL Tech, National Elm, Indian Hotels – are technically set to see a good uptrend.
Stocks to buy
HCL Tech: BUY 1719 | Target Price: 1820 | Stop Loss: 1670
Pole and flag pattern has appeared with breakout on daily scale, with high buying volume to support the upward move. ADX line has turned upwards and positive DI is above negative DI, which shows that the bullish trend has strength to support it.
National Alum: Buy 181 | Target Price: 195 | Stop Loss: 175
After retesting its support price is slowly moving upwards indicating a bullish trend reversal with an initial gap up for an upward move. The MACD line has crossed above the signal line from below and turned upwards indicating bullish momentum.
Indian Hotels: Buy Here 661 | Target Price: 700 | Stop Loss: 640
The price has broken out of the symmetrical triangle pattern and there is above-average buying volume on the daily time frame. The Relative Strength Index which measures the momentum of a stock has turned above the center line which indicates that the stock has room to move higher.
Disclaimer: The views and recommendations expressed in this analysis are those of the individual analysts or broking companies and not of Mint. We strongly advise investors to seek advice from certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.