Stock Recommendations: Rajesh Palviya’s Top 3 Stock Recommendations for the Week Ahead

“Bank Skilled The structure has become a little weak and the road Nifty Bank has broken its 20-day moving average, we believe that if it remains below the 51,000 mark, I think there could be more supply pressure that we could see on continuation of this down move and possibly Bank Nifty may try to move further towards the 50,200, 50,300 zone which is the next immediate support area as per the derived data “in front” he says Rajesh PalviyaAxis Values.

Tell us quickly what levels you are seeing. Secondly, tell us if this correction we have seen is a temporary problem or if you think we are going to continue and the market will have many more problems in the future.
Rajesh Palviya: So, if we look at the correction over the last few days, now Nifty has again fallen below 25,000 level. That was the main put option-based rally in the monthly series as well as in the weekly series. And we have broken both these support areas at the closing basis. If we look at the short-term structure, if we stay below 25,000 level, yes, we could possibly see more supply pressure on continuation of this down move. And Nifty may try to move further down to test its 20-day moving average, which is almost around 24,800 area. So, if it breaks below 24,800, then we could see continuation of supply pressure towards 24,600, which is the next main put option-based rally that we are seeing both in the weekly and monthly series.

Hence, below 24,800, we could further drop towards 24,600 which can be a possibility if we look at the short term data setup. On the upside, 25,100 can act as a major supply zone. Until Nifty crosses those levels, I think a minor pullback can again attract supply pressure on the upside.

The structure of Bank Nifty has weakened a little bit and the way Bank Nifty has broken its 20-day moving average, we believe that if it remains below the 51,000 mark, I think there could be more supply pressure that we could see in the continuation of this downward move and possibly Bank Nifty may try to move further towards the 50,200, 50,300 zone which is the next immediate support area as per the derivatives data front.

So, Bank Nifty looks a bit weaker as compared to Nifty and I think 51,000 is the stop loss if anyone has already opened their short position. So, they can continue with the stop loss of 51,000 for the downside target of 50,400 to 50,300.

Tell us what kind of outlook we have seen in the indices. Now it has been sideways and especially negative for F&O stocks and the way that SEBI It is very clear that they want to take further measures to restrict the derivatives market, they want to increase the barriers to entry. Do you think F&O stocks will suffer further cuts and take more damage from now on?
Rajesh Palviya: So definitely the tightening that SEBI wants in the F&O space as a barrier to entry for small retail investors, I think yes, we could see further haircuts due to a lot of liquidation that we could see in the derivatives space.
And again, there is a drag on collateral stocks as well. So I think we could see even more pressure in the derivatives universe. Even in today’s drop, if you look at the drop, the increased supply pressure was only in the bulk of the derivatives universe.

The cash segment was still holding firm and we have seen some of the cash segments showing good traction in terms of buying, but the entire derivatives universe was under pressure.
So, I think this could be one of the reasons why SEBI is moving towards this tightening in the derivatives space, so it could be one of the reasons why we have seen this kind of offering in this space.

The kind of historical data that we have seen for the month of September and generally the seasonality data indicates that we have more often than not ended up with negative returns for the month of September only. It seems like history is repeating itself. But is it too early to say what kind of support levels one would look out for, both for Nifty and Bank Nifty, for the week ahead?
Rajesh Palviya: So, again, it is early to say because again the main event is scheduled for this month and that can be a game-changer for this correction that we have seen since the beginning of September. So, I think the levels that we are focusing on for Nifty are 24,600, which is the major support area for Nifty. On the higher side, 25,100 is the immediate resistance area. And for Bank Nifty, 50,200 is the immediate support area and on the higher side, 51,300 is the key resistance area for Bank Nifty for the short-term structure.

I believe you also have some stock picks you’d like to share. Let us know which ones you’ve chosen. What looks good for the week ahead?
Rajesh Palviya: Therefore, the pharmaceutical sector is a sector where we see that there will also be continuity. Most stocks are showing good traction. In Alkem Lab, we see that the uptrend continues. The stock is trading almost close to its all-time high trajectory. Therefore, Alkem Lab is a buy with an upside target of 6500, keep your stop loss around 6260.

The second stock we like is DMart. It has made a very strong breakout on the weekly chart. After a consolidation of almost 8 to 10 weeks, the stock has made a breakout on the weekly chart. The way the stock has made a breakout, we believe that DMart can extend its gain. 5450 is the immediate target we are projecting towards and a stop loss of 5250 can be kept to buy DMart.

And the third stock is from the insurance sector, SBI Life. Continuation of the uptrend. The stock is showing good traction. We believe that Life at SBI You can extend your profit until 1945. Therefore, you can buy this stock with a stop loss of 1870.