On Tuesday, the largest Nifty stock exchange of the New York Stock Exchange rose 7 points, or 0.03%, to close at 25,018, while the BSE Sensex rose 13 points, or 0.02%, to end at 81,711.
Analyst Sudeep Shah, Assistant Vice President and Head of Technical and Derivatives Research at SBI Securities, suggests how one should trade stocks that were in focus in the previous trading sessions based on technical and derivative data:
F&O data suggests a long build-up in Private First Class
The stock of Energy Finance Corporation Ltd. A bullish breakout of the pennant occurred on Tuesday. This breakout is confirmed by robust volume. The formation of a sizable bullish candle with a long lower shadow further reinforces the strength of this breakout.
The stock is currently trading above its short-term and long-term moving averages. These averages are on an upward trajectory and are in the desired sequence, suggesting that the trend is strong. The daily RSI is about to cross the 60 mark and is on an upward trajectory.
On the derivatives front, the August future rose nearly 4% in Tuesday’s trading session. The cumulative open interest of the current, near and distant series also rose by 5.53%.
There is a noticeable concentration of open interest in call options at the strike price of 550, followed by the strike price of 560. Whereas, significant open interest is seen in put options at the strike price of 520. If we talk about the option chain, from the strike price of 530 to 510, there has been selling of put options. This clearly indicates bullish momentum in the stock.
This confluence of technical and derivative factors indicates a strong bullish momentum in the stock. Hence, we recommend accumulating shares in the Rs 540-535 zone, keeping a stop loss at Rs 515. On the upside, it is likely to test the Rs 570 level, followed by Rs 580 in the near term.
Bajaj FinservThe breakout of the symmetrical triangle of ‘s generates optimism
On Tuesday, the Nifty Financial Services Index clearly outperformed the blue-chip indices. Among the index components, most stocks closed on a positive note.
The stock of Bajaj Finserv Ltd It has resulted in a breakout of the symmetrical triangle on a weekly scale. This breakout is confirmed by robust volume. In addition, it has formed a sizeable bullish candle with a long lower shadow, which adds strength to the breakout.
ETMarkets.comCurrently, the stock is trading above all the short-term and long-term moving averages. These averages are on an upward trajectory and are in the desired sequence, suggesting that the trend is strong. Most notably, the weekly RSI has breached the 60 mark for the first time after the calendar year 2024. Moreover, the daily and weekly MACD remain bullish as they trade above their zero line and signal line.
The derivative data also supports the overall bullish chart structure. The August future has increased by almost 2 percent and the cumulative open interest of the current, near and far series has increased by almost 5 percent. This indicates an overall accumulation of long positions. Looking at the options chain, it is noticeable that there is a concentration of call open interest at the strike price of 1740, while a considerable open interest is seen on the put side at the strike price of 1700. Talking about the options chain, from the strike prices of 1720 to 1780 CE, call buying has been seen. Whereas, on the put side, from the strike prices of 1720 to 1680 CE, put selling has been seen. This clearly indicates a bullish momentum in the stock.
These technical and derivative factors are aligning in favour of the bulls. Therefore, we recommend accumulating shares in the Rs 1730-1710 zone with a stop loss of Rs 1660. On the upside, it is likely to test the Rs 1810 level, followed by Rs 1880 in the near term.
(Disclaimer: The recommendations, suggestions, views and opinions of the experts are their own and do not represent the views of The Economic Times)
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