Market Overview: The Indian stock market faced a notable setback on Thursday, with the benchmark indices, Sensex and Nifty 50, experiencing a sharp decline of over 2 percent each. This downturn was driven primarily by escalating geopolitical tensions in the Middle East and adverse signals emanating from global markets. Market breadth was similarly negative, as broader indices such as Nifty Midcap and Nifty Smallcap also shed more than 2 percent during the trading session.
According to market analyst Chandan Taparia, the Nifty Index opened significantly lower, dropping nearly 350 points below the 25500 mark. It continued to decline during the session, hitting a low of 25230 before concluding with a loss of approximately 550 points. The formation of a Bearish candle on the daily chart, characterized by a long upper shadow, indicates persistent selling pressure at higher levels. The index has been establishing lower highs and lower lows over the past three trading sessions. As long as it remains below the 25300 level, further weakness is expected, possibly targeting 25100 and 24950. Resistance levels are identified at 25350 and 25500.
On the options front, significant activity has been noted. The maximum Call Open Interest (OI) stands at 26000 and 27000 strikes, while the maximum Put OI is at 25000 and 24000 strikes. Moreover, call writing has been observed at the 26000 and 25500 strike levels, whereas put writing is concentrated at the 24000 and 25000 strikes. This data indicates a broader expected trading range between 24800 and 25800, with an immediate range between 25000 and 25500.
Bank Nifty Analysis
Focusing on the Bank Nifty outlook, analyst Chandan Taparia noted that the Bank Nifty Index opened over 600 points lower and remained under selling pressure throughout the day. Similar to the Nifty, it formed a Bearish candle on the daily scale and has been exhibiting lower highs and lower lows over the last four sessions. The index has seen a significant correction of approximately 2700 points in recent days, prompting a close near its 50-day Exponential Moving Average (DEMA). For the foreseeable future, as long as the index remains below 52222, further declines to levels around 51500 and 51250 can be anticipated, while resistance is encountered at 52222 and 52350.
Recommended Stocks for Investment
Chandan Taparia has identified three stocks for potential purchase as of October 3. These stocks are technically positioned to experience a substantial uptrend. Here are the recommendations:
JSW Steel
Buy at: ₹1039
Target Price: ₹1090
Stop Loss: ₹1016
JSW Steel showcases a robust uptrend, consistently making higher highs and higher lows on the daily chart, backed by strong trading volumes. The rising ADX line suggests that the current upward movement possesses the necessary strength to continue.
Polycab
Buy at: ₹7332
Target Price: ₹7730
Stop Loss: ₹7125
Polycab has recently broken out of a consolidation phase, with the last candlestick exhibiting size indicative of a bullish trend. The Relative Strength Index (RSI) confirms a positive positioning, supporting the ongoing upward movement.
Lal Path Lab
Buy at: ₹3419
Target Price: ₹3610
Stop Loss: ₹3327
Lal Path Lab has surpassed a notable double-bottom pattern on the daily time frame, accompanied by above-average buying volume that reinforces the breakout. A bullish crossover signal from the MACD indicator further affirms this momentum.
Disclaimer: The insights and recommendations mentioned in this analysis reflect the opinions of individual analysts or brokerage firms. We recommend that investors consult with certified financial advisors before making any investment decisions, as market conditions can shift rapidly and personal circumstances may vary.
