Nifty in oversold territory; pullback to 24,000 possible: Analysts
The Nifty 50 has declined and is now near oversold levels. Analysts suggest a potential pullback towards 24,000 if support at 23,600 is maintained. Traders are advised to consider specific option strategies for the upcoming weekly expiry. Several ...
By ET Bureau | Updated:
THE ECONOMIC TIMES
As long as the index holds above 23,600, it could see a pullback towards 24,000, especially if crude prices are lower. The index closed at 23,767 on Friday.
The Nifty 50 declined over 2.3% in the past week and is now below its key support level of 23,800 seen during the past few weeks. Analysts said that Nifty is now at oversold levels. As long as the index holds above 23,600, it could see a pullback towards 24,000, especially if crude prices are lower. The index closed at 23,767 on Friday.
Trading Strategies : The recommended strategy for Nifty Option for weekly, August 4 expiry is a Bear Put Spread, ideal for negative bias amid geopolitical concerns and rising crude. Traders are advised to buy one lot of 23,800 strike Put Option and simultaneously sell one lot of 23,500 strike Put Option. The maximum risk in the strategy is 100 points (Rs 6,500) and the maximum potential Profit is 200 points (Rs 13,000) per lot.
TOP STOCKS PICKS Azad Engineering: Buy | CMP: Rs 2,439| Target: Rs 2,580 | Stop loss: Rs 2,365
Stock has retested its breakout zone around 2300 and is witnessing a bounce, highlighting strong demand on declines. It is now on the verge of breaking out from a 7–8 session tight consolidation, indicating volatility compression before a potential expansion. RSI is also on the verge of a bullish crossover, reinforcing the possibility of fresh upside momentum.
Stock is in a strong uptrend, consistently respecting its 20-DEMA with every minor dip. It continues to form a higher top - higher bottom structure, reflecting sustained buying strength. The rising ADX confirms the strength of the trend, while the outperformance of the pharma sector provides an additional tailwind for further upside.
NILESH JAIN HEAD- EQUITY TECHNICAL & DERIVATIVE RESEARCH, CENTRUM FINVERSE
Trading Strategies: The index is now trading near the lower boundary of a triangle pattern, with a crucial support placed at 23,600. As long as this support is defended, the possibility of a technical pullback towards 24,000 remains intact. Given the expectation of a gradual up move in the coming week, we recommend deploying a Bull Call Spread in the upcoming monthly expiry: Buy 1 lot of 23,800 Call at 122 Sell 1 lot of 24,000 Call at 44
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This results in a net debit of 78 points, with the maximum loss capped at (Rs 5,070). The strategy offers a maximum profit potential of 122 points per lot Rs 7,930, while the breakeven point is placed at 23,878.
The stock has broken out on strong volumes, signalling robust buying interest. Daily momentum indicators have also flashed fresh buy signals, reinforcing the bullish outlook.
The stock crossed its 21-DMA at 1,770 and continues to trade above above its short-term as well as long-term moving averages. Strong volumes indicate sustained buying interest, reinforcing the bullish outlook.
RUPAK DE SENIOR TECHNICAL ANALYST AT LKP SECURITIES
Trading strategy for Nifty: Buy Nifty Futures between 23,720-23,770, with stop loss at 23,600 for a target of 24,000 (all spot prices)
LTM: Buy at Rs 4,091 | Target: Rs 4,300 | Stop loss: Rs 3,950 The stock has formed an engulfing candle on the daily chart. The RSI is in a bullish crossover, indicating strong momentum. Besides, the price has risen above the 50 EMA on the daily timeframe.
Emmvee Photovoltaic Power: Buy at Rs 331 | Target: Rs 350 | Stop loss: Rs 317 The stock has formed a bullish engulfing candle on the daily chart near the support of the 50 EMA, making the pattern more significant and indicating the possibility of a decent rally in the near term. The RSI is in a bullish crossover, indicating strong momentum.
