Meanwhile, financial world Stocks rose to new records on Thursday as markets cheered the Federal Reserve’s decision to aggressively cut interest rates to protect the job market.
Analyst Sudeep Shah, Assistant Vice President and Head – Technical and Derivatives Research, SBI Securities, suggests how to trade stocks that were in focus in the previous trading sessions based on technical and derivative data.
Banking index outperforms broader markets as AU Bank achieves consolidation
On Thursday, Bank Nifty outperformed the blue-chip indices, demonstrating its relative strength. Despite profit-taking at higher levels, the overall chart structure remains bullish, indicating potential for further gains. Most of the Bank Nifty components closed in the positive territory, reinforcing the bullish momentum of the index.
He stock of At the Small Finance Bank The stock has given a consolidation breakout on a daily scale. This breakout is confirmed by a higher 50-day average volume. A significant bullish candle on the day of the breakout further strengthens this move. Currently, the stock is 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.
Momentum indicators and oscillators also support the overall bullish chart structure. The daily and weekly RSI are in bullish territory and are in an upward mode. Additionally, the trend strength indicator, ADX, is trading above the 37 level, which shows solid trend strength. Derivative data aligns with the overall bullish chart structure. The September future is up more than 3% and the cumulative open interest of the current, near, and distant series has also increased by 10.25%. This indicates an overall accumulation of long positions.
There is a noticeable concentration of open interest in call options at the 750 strike price, followed by the 780 strike price. At the same time, significant open interest is seen on the put options side at the 720 strike price. Talking about option chains, from the 780 strike price to the 750 CE strike price, buying of call options has been seen. Whereas, on the put options side, from the 760 strike price to the 730 strike price, selling of put options has been seen. This clearly indicates that bullish momentum in stock.
Hence, we recommend accumulating stocks in the Rs 755-750 zone with a stop loss at Rs 725 level. On the upside, it is likely to test Rs 790 level followed by Rs 820 in the near term.
F&O data suggests near-term accumulation in BEL
Bharat Electronics Ltd shares have experienced a breakout of the horizontal trend line on Thursday. This breakout was confirmed by the previous 50-day average volume. Moreover, the stock has formed a sizeable bearish candle on the day of the breakout.
The stock is currently trading below its short- and medium-term moving averages. The 20- and 50-day EMAs have started to turn down. The upward slope of the 100- and 200-day EMAs has slowed down significantly, which is a bearish signal. The daily RSI is in bearish territory and has fallen below its previous low. The daily MACD remains bearish as it trades below its zero line and its signal line.
ETMarkets.comThe derivatives data align with the overall bearish chart structure. The September future has fallen by 3.42 percent and the cumulative open interest of the current, near and distant series has increased by 3.03 percent. This indicates an overall accumulation of short positions.
There is a noticeable concentration of buy open interest at strike 280, followed by strike 290. Whereas, significant open interest is seen on the put side at strike 270. Talking about the option chain, from strike 285 to strike 265, buy buying has been seen. Whereas, on the put side, from strike 270 to strike 230, sell buying has been seen. This clearly indicates bearish momentum in the stock.
Hence, we recommend selling the stock in the Rs 273-271 zone with a stop loss at Rs 280 level. On the downside, it is likely to test the Rs 258 level followed by Rs 250 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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