First, I want to understand from a technical perspective. Are we approaching the September series now, is there a pretty good series like we saw in August, if Nifty goes up 4%, especially if Nifty wins 11 days in a row. How should we approach the September month now? If we look at the seasonal data, September has been a negative month 6 out of 10 times. But it has been a good month for the IT sector. What do you think about this?
Rajesh Palviya: So if you look at the rollover data, it is on the positive side. The rollover in the August series is 77.50% which is higher than the average of the last 3 months and 6 months. However, the rollover data for Bank Nifty is on the lower side. However, if you look at the Nifty structure, I think the positive flow has been going on for 11 days in a row, which clearly shows that there is continuous buying activity in the market and the market is confident to go higher. So if you look at the technical structure, I think this momentum can expand further. The way the broad market is participating in this uptrend, the large cap space is also showing good strength and there is also sectoral rotation in this uptrend. So if this uptrend continues, it definitely gives me confidence that the rally can expand to 25,400 to 25,500.
At this point 25,000 has major put-based concentration. So I think we should keep our long position with stop loss tracking at 25,000, 25,100, and a possible rally could extend to 24,400 to 24,500.
For this September series, we expect the September series range of Nifty to be 24,800 on the downside and 25,600 on the upside. This will be the possible range for Nifty. For Bank Nifty, the immediate supply zone placed is around 51,500, which is a very important level to cross on the upside.
If Bank Nifty crosses 51,500, there could be short covering action in Bank Nifty and then the rally could extend to 52,000. The rollover data also shows some stock-wise rollover action in the banking sector, which is giving us a signal that there could be short covering action in Bank Nifty next week and we think we could see higher levels. So we are bullish on Bank Nifty too and 51,000 is a stop loss to maintain long positions. In terms of sectors, the rollover action is clearly seen in pharma, metals, oil and gas. All these sectors are showing good momentum in terms of rollover activity. So I think there could be continued support buying action in pharma, auto, metals, oil and gas, FMCG and all these sectors could remain bullish in the September series.
Tell me now what to expect from FII participation. Now DII has lent its resilience and has been a good support so far. But now FII has also turned positive. Looking at the future of FII login index at the start of September series, it looks very promising. It is almost 70%. What do you think about this? In which sectors do you think money is moving?
Rajesh Palviya: So now clearly FII has turned bullish and we have been seeing positive data on FII for the last few days and if this continues I think there will be sustained buying action. So I think we will see higher levels in the market. I think the flow is coming to the pharma and IT sectors. The way these two sectors have been going up in the last few days, there has been sustained buying action in pharma and IT sectors as well.
So I think we will see good momentum in both these segments and as we discussed earlier, we will see more upside momentum here in large cap IT and mid cap IT. So in large cap IT, I think we can look at TCS and Infosys from a short to short term trading perspective. Those two stocks look promising. And in mid cap IT, I think LTTS is one of the stocks that we will see good momentum. And another stock that we like is Birlasoft.
These two stocks are showing strength in the mid-cap IT market. In the pharma market, many stocks are now moving higher. Lupin is our preferred pick in the pharma market and we believe we can see more upside momentum in Lupin. So we can see this stock in the pharma market as well and the rally in Lupin can extend to 2350, 2400 levels.
And another stock in the pharmaceutical sector is Sun Pharma. This stock also looks promising. So, since Sun Pharma’s target is expected to be 1950, you can buy and accumulate this stock from a short-term trading perspective.
You’ve talked a lot about stocks in the IT and pharmaceutical sectors, but is there any particular stock you’d like to recommend to our viewers this week?
Rajesh Palviya: First stock is Ajanta Pharma, a pharma sector. It is a mid-cap pharma sector and the stock has broken out of the pole and flag formation on the daily chart and the way the stock has broken out with volume action, I think it can go up to 3360 from here, so you can buy Ajanta Pharma with a stop loss of 3185. Another stock is UPL, an agrochemical sector. The stock has been in a bear market for a long time but now if you analyze the way the stock has formed a base and the monthly and weekly charts, the stock has broken out and is now holding its short term, short term moving averages above all else. I think UPL can extend its gains. I expect a stop loss of 592 and target 620.
And the third stock from the bank and the large private bank ICICI Bank looks promising. Looking at the way the stock has been rising over the past few weeks and the current price is comfortably above the 1200 mark, I think this is the third week in a row where the stock has been forming a higher high-low pattern. This clearly shows that there has been continuous buying activity in this stock.
So I think ICICI can extend its gains and the stock can try to move back towards its all-time high trajectory. ICICI Bank’s target is 1270 and stop loss is 1205.
