Nifty 50 likely to rise in the short term; BHEL, CDSL among top technical picks by Rupak De of LKP Securities

Stock market today: Tuesday’s session began with modest gains for the domestic benchmark indices, the Sensex and Nifty 50, as traders awaited US Federal Reserve Chair Jerome Powell’s remarks for clues on when to cut interest rates.

The Nifty 50 began trading at 24,351.00 level, up 30.50 points or 0.13%, while the 30-share BSE Sensex opened up by 146.83 points or 0.18% at 80,107.21 level.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said that despite the high valuations, the market remains strong and not displaying any symptoms of a severe drop. The fact that largecaps with solid fundamentals are seeing purchasing is a positive trend in the market. The market seems to be waiting for triggers to push over the current levels. This week’s Q1 numbers might be the catalyst for this. One potential catalyst for a breakthrough might be the budget, which is scheduled to be unveiled on this month’s 23rd.

On the future and options (F&O) market, as per technical analysts, highest open interest (OI) in Bank Nifty is at ATM strike of 52500, indicating traders expecting a strong move from the current levels on either side. For today’s weekly expiry of Financial Nifty, analysts are seeing CALL writers are more aggressive as compared to PUT writers indicating limited upside for the session.

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Technical views by Rupak De, Senior Technical Analyst, LKP Securities on F&O market

Bank Nifty

For Bank Nifty the last expiry date was Thursday, July 4. According to Rupak De, Bank Nifty ended with a marginal gain at the end of a volatile week. The volatility was led by movements in HDFC Bank, which has a dinosaur’s weight in the Bank Nifty. The index managed to close above the critical short-term moving average and above the short-term breakout point, indicating a positive setup. The overall sentiment might favour the bulls as long as it remains above 52,000. On the higher end, a sustained trade above 52,750 might put the index back on a high growth path.

The immediate range for Bank Nifty is visible at 52,500–53,000. Put writers have the highest positions at 52,500 strike, followed by 52,000 strike, while call writers have the maximum open interest at 53,000 strike, followed by 53,500 strike. Put writers were seen unwinding their positions on the last day, whereas call writers increased their positions on the same day, ending the week with a negative sentiment for Bank Nifty on option front.

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Nifty 50

For Nifty 50 the last expiry date was Friday, July 5. The Nifty 50 has continued to rise as it closed above the upper band of the rising channel, showing buoyant sentiment. So far, 24,200 has acted as significant support. The trend might remain strong as long as it remains above 24,200. Only a decisive drop below 24,200 might take the index towards 24,000-23,950. However, given the resilience of the current bullishness, the index might continue to rise in the short term. A decisive move above 24,400 might induce a rally towards 24,600/24,800, explained Rupak De.

The immediate range for Nifty 50 is visible at 24,000–24,500. Put writers have the highest open interest (OI) position at the 24,000 strike, followed by the 24,200 strike, while call writers have the maximum open interest at the 24,500 strike, followed by the 24,800 strike. Both call writers and put writers added heavily to the open interest on the first day of the current weekly expiry, with the 24,200 put seeing the highest activity, whereas the 24,800 call saw the maximum open interest addition on Friday, suggesting an optimistic short-term outlook for Nifty 50.

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Technical stock recommendations for the week

Buy Bharat Heavy Electricals Ltd (BHEL) at ₹316; Target Price of ₹340; Stop Loss of ₹304

According to Rupak De, the stock has given a falling trendline breakout, suggesting a rise in optimism. The trend looks positive as the index has sustained above the 50 EMA on the daily timeframe. Additionally, a hidden positive divergence is visible on the daily RSI, indicating strong momentum in the current bullish phase. On the higher end, the stock might move towards 340. On the lower end, support is placed at 304.

Buy Central Depository Services Ltd (CDSL) on dips at around ₹2,250; Target Price of ₹2,600; Stop Loss of ₹2,100

CDSL has been in a sideways consolidation after a sharp up-move. This is very common when a stock is getting ready for a bigger rally. The strength may remain in the stock until it falls below the 50 EMA (currently pegged around 2100). Therefore, CDSL might remain buy on dips with a stop loss of 2100. On the upside, the stock might move towards 2600 in the short term, explained Rupak De.

Buy Borosil Ltd at ₹500-515; Target Price of ₹580; Stop Loss of ₹484

After finding support at the 200 SMA on the weekly timeframe, the stock has been in recovery mode. The strength in price is backed by rising volume. The weekly RSI is in a bullish crossover and rising. In the short term, the trend might remain positive, with the potential to reach 580. Support is placed at 484, advised Rupak De.

Also Read: Nifty 50 Share Price Live Updates: Nifty 50 opened at ₹24351

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 decision.