Nifty rally faces crucial test at key resistance levels: Analysts

Nifty gained 3% last week, boosting sentiment and raising hopes of a recovery, though analysts caution that it must clear key resistance levels for further strength.

CHANDAN TAPARIA, HEAD – DERIVATIVES & TECHNICALS, WEALTH MANAGEMENT, MOTILAL OSWAL FINANCIAL SERVICES

Nifty has formed a higher-top, higher-bottom structure, reclaimed its 20-day average and sustained above 23,000. A Morning Star pattern, rising RSI and support at 22,786 keep the outlook bullish, with 23,400–23,500 as the next upside zone.

Nifty Strategy: For the October 27 monthly expiry, buy one lot of the 23,200-strike call and sell one lot of the 23,400-strike call. The bull call spread has a maximum risk of 70 points (Rs 4,550 per lot) and a maximum potential profit of 130 points (Rs 8,450 per lot).

TOP STOCKS FOR THE WEEK

Coforge: Buy | CMP: Rs 1,951 | Target: Rs 2,070 | Stop loss: Rs 1,890

The stock has formed a bullish pin bar, trades above short-term averages near its 52-week high, and a breakout above Rs 2,000 could trigger further gains

Kotak Bank: Buy | CMP: Rs 447 | Target: Rs 475 | Stop loss: Rs 433

The stock remains in an uptrend near its all-time high, with higher highs and strong volumes, and a breakout above Rs 460 could trigger fresh gains.

Read more: Can Nifty, Sensex rally further or will bears reign in? 5 factors to steer market this week

HITESH RATHI, TECHNICAL ANALYST (EQUITY & DERIVATIVES), ANGEL ONE

Bank Nifty is approaching the 56,000–56,100 band, which previously acted as support and is now expected to pose resistance. The zone also coincides with the 50-day exponential moving average and the 20-week and 50-week exponential moving averages, creating a confluence of resistance.

Bank Nifty Strategy: Sell on rallies towards 56,100– 56,200, with a stop loss at 56,600 and targets at 55,500–55,400.

TOP STOCKS FOR THE WEEK

Indian Hotels: Buy | CMP: Rs 772 | Target: Rs 880–885 | Stop loss: Rs 704

A breakout above a major falling trendline and consolidation range signals a potential uptrend, with a multi-brick Renko breakout further reinforcing the bullish setup.

Supreme Industries: Buy | CMP: Rs 3,602 | Target: Rs 3,870–3,880 | Stop loss: Rs 3,370.

The Rs 3,200–3,290 band remains strong support, with buying interest reflected in a bullish anchor column. A bullish 100% pole and a turtle breakout on the 0.25% times 3 daily Point and Figure chart indicate improving short-term momentum.

SOMIL MEHTA, HEAD OF RETAIL RESEARCH, MIRAE ASSET SHAREKHAN

Nifty has rebounded from 22,180 and is testing its 40-day average, with support at 22,800–22,550 and resistance at 23,475– 23,600. Bank Nifty trades in a narrow range, but momentum is bullish; a move above 56,056 could target 56,550–56,925, while support lies at 55,400–55,500.

Nifty Strategy: Buy on dips towards 22,800, with targets at 23,475–23,600. The quoted stop loss of 23,550 on a closing basis requires confirmation, as it is above the stated buying level.

Bank Nifty Strategy: Buy at the current market price or on dips towards 55,400–55,500, with a stop loss at 55,000 on a closing basis and targets at 56,500–56,925.

Read more: Mega Jio Platforms IPO to lead Rs 31,663 crore offerings this week; 9 listings lined up

TOP STOCKS FOR THE WEEK

Nykaa: Buy | CMP: Rs 344 | Target: Rs 363–375 | Stop loss: Rs 331.50

The stock has bounced from the lower end of its sideways range, and a move above Rs 346 could lift it towards Rs 363–375 if Rs 331.50 hold.

Hindalco: Buy | CMP: Rs 910 | Target: Rs 955–975 | Stop loss: Rs 858

The decline from the May high seems to have completed an a-b-c pattern, with bullish signals pointing to a recovery towards Rs 955–975 if Rs 858 holds.
Add as a Reliable and Trusted News Source Add Now!
(You can now subscribe to our ETMarkets WhatsApp channel)