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Nifty Outlook
Despite being a truncated week, the market witnessed significant action—unfortunately, it was against the bulls. The week began on a negative note, and as it progressed, the selloff accelerated. Any minor bounce was quickly sold into, leading Nifty to end the week with a sharp 4.31 per cent decline, closing just above the 25000 mark.
Despite being a truncated week, the market witnessed significant action—unfortunately, it was against the bulls. The week began on a negative note, and as it progressed, the selloff accelerated. Any minor bounce was quickly sold into, leading Nifty to end the week with a sharp 4.31 per cent decline, closing just above the 25000 mark.
The bears were in full control, effortlessly breaking through support levels and erasing more than 1200 points from the all-time high in just five sessions. In our previous outlook, we identified the key resistance level of 26200 - 26300, the 100% target of the Year 2023 flag breakout, and after failing to surpass that level, prices precisely corrected from there.
During the initial part of August and September, we saw nervousness in the market followed by a rally to new highs. However, the start of October paints a different picture as the market has broken below the trendline connecting the higher lows of the last two months, confirming a channel breakdown.
With prices closing just at the key 50 EMA support, this has been one of the sharpest weekly drops in recent times, forming a strong bearish candle on the weekly chart, signaling more potential downside ahead. Given these observations, further pain is on the cards, with the next key support around the September swing low of 24750 followed by 24500.
However, traders should exercise caution with short positions, as some in-between bounces cannot be ruled out due to oversold conditions in momentum indicators on intraday charts.
On the upside, Friday's high near 25500, which coincides with the 20 EMA and the channel breakdown level, will act as a stiff resistance, with 25300 being the immediate resistance before that. Volatility is expected to remain elevated, and traders should avoid unnecessary risks. Its also crucial to monitor global developments, as well as regulatory updates, which have been contributing to the recent market selloff.
Stock recommendations
During the initial part of August and September, we saw nervousness in the market followed by a rally to new highs. However, the start of October paints a different picture as the market has broken below the trendline connecting the higher lows of the last two months, confirming a channel breakdown.
With prices closing just at the key 50 EMA support, this has been one of the sharpest weekly drops in recent times, forming a strong bearish candle on the weekly chart, signaling more potential downside ahead. Given these observations, further pain is on the cards, with the next key support around the September swing low of 24750 followed by 24500.
However, traders should exercise caution with short positions, as some in-between bounces cannot be ruled out due to oversold conditions in momentum indicators on intraday charts.
On the upside, Friday's high near 25500, which coincides with the 20 EMA and the channel breakdown level, will act as a stiff resistance, with 25300 being the immediate resistance before that. Volatility is expected to remain elevated, and traders should avoid unnecessary risks. Its also crucial to monitor global developments, as well as regulatory updates, which have been contributing to the recent market selloff.
Stock recommendations
NSE Scrip – JK PAPER
View - Bullish
Last Close – Rs 490
Since the March swing lows, prices saw a strong rally, doubling from Rs 320 to Rs 640. However, over the last couple of months, prices entered a correction phase.
This week, despite a broad-based sell-off in the broader market, prices outperformed and resumed their uptrend after finding support at the 61.8 per cent retracement of the previous rally and at the prior breakout zone.
On the daily chart, a bullish range breakout, accompanied by significant volume, signals positive momentum for the bulls.
This week, despite a broad-based sell-off in the broader market, prices outperformed and resumed their uptrend after finding support at the 61.8 per cent retracement of the previous rally and at the prior breakout zone.
On the daily chart, a bullish range breakout, accompanied by significant volume, signals positive momentum for the bulls.
Hence, we recommend to BUY JK PAPER around Rs 490 - Rs 486 | SL: Rs 469 | TGT: Rs 530
NSE Scrip – LALPATHLAB
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View - Bullish
Last Close – Rs 3,495
The stock continues to follow a higher high, higher low price pattern, with dips toward the 50 EMA being consistently bought. Despite the overall market downturn this week, the stock broke its previous high, confirming a bullish breakout and entering uncharted territory. The breakout was accompanied by a surge in volume, signaling strong momentum, and we anticipate continued outperformance.
Hence, we recommend to BUY LALPATHLAB around Rs 3,495 - Rs 3,480 | SL: Rs 3,350 | TGT: Rs 3,816
(Rajesh Bhosale is an equity technical analyst at Angel One Ltd. Views expressed are his own.)
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