Benchmark Index Nifty-50 settled lower amidst range-bound expiry trade as bulls failed to push the Index beyond 17,700 levels. Further, the Nifty Index piled on a massive 5.90 per cent in the September series. Heading into the October series, bears seem to have an upper hand as Index is losing momentum on the upside following multiple failed attempts to break out of the immediate hurdle between 17,950-18,000 levels. For October, the index can remain subdued or witness minor profit booking as RSI has started to trend lower after forming a negative divergence.
Immediate support on the downside is at 17,550-17,500 which happens to be a trendline support and 20-DMA. Breakdown from this support may trigger deeper corrections to levels of 17,250-17,000. On the flip side, breakout above 18,000-18,080 levels will resume the uptrend. One should also keep a close eye on the VIX which has climbed back above 18 levels; a move towards 23-24 may lead to sudden corrections as well.
Equity recommendations
SCI | Buy at CMP of Rs 121
Target: Rs 130
Stop Loss: Rs 116
The stock has broken out of a consolidation pattern on good volumes triggering a resumption of the uptrend. Technical indicator RSI has turned upwards after taking support at the 40 level suggesting strength in the stock.
M&M Finance | Buy at CMP of Rs 185
Target: Rs 195
Stop Loss: Rs 180
The stock has resumed its uptrend after testing the trendline support in the recent throwback. Further, RSI has also turned upwards after formation of a positive reversal pattern.
(The author, Aditya Agarwala, is Senior Technical Analyst, YES Securities. The views are his own)
