On the last trading day of August, the Indian stock market witnessed an upbeat start, with domestic benchmark indices—Nifty 50 and Sensex—opening higher, buoyed by a global rally sparked by strong GDP figures from the U.S. economy. The BSE Sensex surged by 0.61%, or 502 points, opening at 82,637.03 points, while the Nifty 50 index climbed by 97.75 points, or 0.39%, to start at 25,249.70.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that the recent market trend has been characterized by a lack of volatility, contributing to steady gains. He noted that the market has been gradually rising over the last 11 trading sessions, with the VIX, a measure of market volatility, dropping to 13.79. The continued accumulation of high-quality large-cap stocks by Domestic Institutional Investors (DIIs), High Net-worth Individuals (HNIs), and Foreign Institutional Investors (FIIs), coupled with a significant reduction in sporadic selling, has supported the market’s resilience. Vijayakumar anticipates that this short-term trend will persist.
Nifty 50 Outlook and Market Insights by Rajesh Palviya, Axis Securities
Rajesh Palviya, Senior Vice President of Technical and Derivatives Research at Axis Securities, shared his insights on the Nifty 50, noting that the benchmark index is currently in a strong uptrend. The Nifty 50 has been forming a series of higher tops and bottoms, and recently reached an all-time high of 25,192, signaling robust bullish sentiment. The index’s position above its 20, 50, 100, and 200-day Simple Moving Averages (SMAs) further confirms this bullish trend.
Palviya expects the current momentum to drive the Nifty 50 towards the 25,300-25,500 levels in the near term, while identifying the short-term support zones at 24,800-24,500 levels. He pointed out that the Relative Strength Index (RSI) on both daily and weekly charts remains in positive territory, quoting above the 50 mark, which supports the continuation of the uptrend.
Stocks in Focus: Friday’s Recommendations by Rajesh Palviya
Palviya provided stock-specific recommendations for the day, highlighting three key stocks: PNB Housing Finance, Power Finance Corporation (PFC), and Tata Motors. Here’s a detailed look at his analysis:
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PNB Housing Finance Ltd (CMP: ₹951)
PNB Housing Finance has shown strong bullish momentum, breaking out of a 7-8 month “multiple resistance” zone at ₹905 on a closing basis. This breakout, accompanied by significant trading volumes, suggests increased participation and bullish sentiment. The stock has regained its short-term averages and rebounded sharply, which reconfirms its bullish outlook.
Technical indicators like the “Band Bollinger” on both daily and weekly charts suggest a rise in momentum, with the RSI also in positive territory across daily, weekly, and monthly charts. Palviya recommends buying, holding, and accumulating PNB Housing Finance with an expected upside target of ₹1,000-1,120, while noting a downside support zone at ₹905-880 levels.
Power Finance Corporation Ltd (PFC) (CMP: ₹555)
PFC has been trading within a range of ₹580 to ₹460 since May 2024, indicating a short to medium-term sideways trend. Recently, the stock has reclaimed its 20-day and 50-day SMAs, confirming a positive trend. The stock is displaying a strong uptrend on weekly and monthly charts, forming a series of higher tops and bottoms. The RSI across daily, weekly, and monthly charts is also in positive terrain, indicating growing strength.
Tata Motors Ltd (CMP: ₹1,112)
Tata Motors has successfully closed above the critical resistance zone of ₹1,105 for the past four weeks, with high trading volumes supporting this breakout. The stock is comfortably above its 20-day SMA of ₹1,073, which acts as a crucial support level. Both daily and weekly RSI indicators are in positive territory, reinforcing the bullish outlook.
Palviya advises investors to buy, hold, and accumulate Tata Motors with an expected upside target of ₹1,200-1,300, while identifying a downside support zone at ₹1,060-1,040 levels.
As the market continues to navigate through global economic influences and domestic trends, these recommendations provide a strategic approach for investors looking to capitalize on the current momentum.
