Trading Setup for September 30: Can Nifty Maintain Record Levels Amid Geopolitical Tensions and Earnings?

The bulls took a breather on Friday ahead of the weekend as the Nifty snapped a six-day winning streak. The index ended in the red, correcting 100 points from the highs, but not before registering another record and almost testing levels of 26,300 on the upside.

However, Friday’s slow session did not stop the Nifty from registering its third consecutive weekly advance and the index is also set to end the month of September at highs. In that six-day rally, the Nifty gained nearly 900 points, also marking its fourth consecutive positive series of F&O.

Monday will be the last trading day of the quarter, after which companies will begin reporting their trading updates for the elapsed period. That will be one of the key factors in determining whether the Nifty is able to maintain its record levels. A major part of the recent Nifty rally has been Nifty Bank and updates from the banking sector may determine which direction the index moves.

There has been concern about the rise in credit card defaults and that may act as a headwind for many of these big banks. The other concern arises from the Middle East, where tensions between Iran, Israel and Hezbollah continue to rise with continued attacks on Lebanon. That will also keep oil prices and the subsequent reaction of the country’s most oil-sensitive sectors in focus.

Another factor to watch next week will be the important US employment data on October 4. US markets have continued to recover after the Fed rate cut and Wall Street indices also posted a third consecutive weekly gain. But the pace of the rally appears to have been slowing due to the poor performance of the S&P 500 and the Nasdaq on Friday.

Domestic investors were big buyers in the spot market on Friday, but foreign investors were net sellers. The figures will also be skewed due to the rebalancing of the Nifty and CPSE indices on Friday, which affected equity flows. Nifty will see two new entrants: Trent and BEL will start trading from Friday, while LTIMindtree and Divis Laboratories will be excluded.

The Nifty has formed a long bullish candle on the weekly charts, which is the third candle in a row, indicating that the bullish trend may continue, said Nagaraj Shetti of HDFC Securities. Expect some consolidation for the Nifty in the coming sessions before the uptrend resumes with downside support now at 25,900.

Amol Athawale of Kotak Securities said buying on dips and selling on rises will be the ideal strategy for short-term traders. For them, 26,100 and 26,000 is an important level for the Nifty, while 26,400 – 26,500 will be a key hurdle. Expect traders to exit their long positions if the index moves below 26,000.

Praveen Dwarakanath of Hedged.in said the market view remains positive with an upcoming target of 26,500 on the Nifty. Options data for October expiration shows an increase in putting and short covering writing on In-The-Money and Out-of-the-Month calls, showing signs of continuation of the current rally .

The Nifty Bank facing selling pressure on Friday was one of the key reasons why the Nifty took a breather on Friday and ended in the red. Nifty Bank trimmed nearly 550 points from its recent rally of over 3,000 points, closing below the 54,000 mark. However, the index managed to post gains during the week. Nifty Bank will be one of the key factors that will determine the trajectory of Nifty for the October series.

Hrishikesh Yedve of Asit C Mehta Investment Interrmediates believes that Nifty Bank has formed a bearish Marubozo candle on the daily charts, indicating weakness but still holding above the breakout point of the rounded bottom pattern. Expect an immediate hurdle for Nifty Bank at 54,000 and 54,500 levels and a decline towards 53,350 – 53,400 levels. If that happens, he advises considering it as a buying opportunity.

What do F&O signals indicate?

These stocks saw the addition of new long positions on Friday, meaning an increase in both price and open interest:

Stock	Price change	OI change
India Granules	2.16%	148.84%
Colgate-Palmolive	3.01%	29.77%
LTIMindtree	0.34%	22.46%
Berger Paints	0.95%	18.58%
BPCL	6.58%	17.09%

These stocks saw the addition of new short positions on Friday, meaning a drop in price but an increase in open interest:

Stock	Price change	OI change
Marico	-0.40%	22.74%
Birlasoft	-1.79%	18.67%
EX	-1.69%	18.38%
Hindustan Copper	-0.26%	16.14%
Bandhan Bank	-0.44%	8.59%

Short covering was seen on these stocks on Friday, meaning an increase in price but a decrease in open interest:

Stock	Price change	OI change
GAIL	2.36%	-9.87%
Syngene	1.02%	-6.02%
REC	2.64%	-5.21%
Atul	1.64%	-5.10%
Canara Bank	2.09%	-4.99%

These are the stocks to watch ahead of Monday’s trading session:

• Trent: Start trading on the Nifty 50 from Monday.
• Bharat Electronics: Start trading on the Nifty 50 from Monday. MCA also approves the incorporation of the BEL IAI AeroSystems joint venture with Israel Aerospace Industries.
• Apollo Hospitals: Rasmeli will buy a 16.9% stake in Arm Apollo Healthco for Rs 2,475 crore in two tranches. With this, Apollo’s stake in its subsidiary will drop from 94.91% to 78.87%.
• BSE: Check the transaction fees for Sensex and Bankex options starting October 1. The trading fee for Sensex and Bankex options has been revised to ₹3,250 per crore premium turnover value.
• Welspun Companies: It emerges as the lowest bidder for a contract worth Rs 1,989.9 crore from the BMC.
• Lupine: The USFDA issues Form 483 with three observations to the company’s facilities in Pithampur, which were inspected between September 16 and 27, 2024.
• Biocon: USFDA issues Form 483 along with four observations to the company’s facilities in Bengaluru, which were inspected between September 23 and 27, 2024.
• Farmova jubilant: The USFDA has classified Jubilant HollisterStier’s Canadian facilities as Official Action Indicated (OAI). The facility, in Montreal, Canada, was inspected on June 18.
• Piramal Pharmacy: The USFDA issues an Establishment Inspection Report (EIR) for the company’s premises in Ahmedabad. Form 483 with no action indicated and zero observations was issued to the company on July 12.
• Zydus Life Sciences: The pharmaceutical company received final approval from the USFDA to manufacture Enzalutamide Capsules, 40 mg. Enzalutamide capsules are androgen receptor inhibitors indicated for the treatment of patients with metastatic castration-resistant prostate cancer. The enzalutamide capsules will be produced at the group’s manufacturing facility in Moraiya, Ahmedabad.
• Pay: Vijay Shekhar Sharma tells CNBC-TV18 that one of his biggest regrets is not choosing the right bankers for his IPO.
• PB Fintech: Management tells CNBC-TV18 that the company is not reconsidering the plan to enter the hospital business and that it is a very important need for today’s middle class.
• Infrastructure dependency: The Calcutta High Court rules in favor of the company by confirming a Rs 780 crore arbitration award against Damodar Valley Corporation.
• Adani Energy Solutions: Signs business transfer agreement with NMPL arm to spin off Adani Dahanu thermal power plant.
• Adani Companies: Arm’s JV unit April Moon Retail buys 74% stake in Cococart Ventures for Rs 200 crore.