Markets at all-time high; here's what to expect from Nifty and Nifty Bank

The previous week turned a historic one for the Indian equity market as the benchmark BSE Sensex scaled 60,000-mark for the first time. On the other hand, the level of 17,300 acted as strong support for the Nifty index as we witnessed a sharp recovery which pulled the index towards the 17,950 mark. Overall, the 50-share index gained 1.5% for the week ended September 24.

The lower end of the rising channel acted as support for the Nifty. Now, the index is very much close to the milestone of 18,000. The price action indicates that the momentum is still in the favour of the bulls. However, a breach of 17,600 would apply brakes to the upside trajectory. On the contrary, a move above 18,000 might extend the rally towards the 18,200 mark. Despite the bullish outlook, we advise traders to avoid aggressive bets and keep booking their long positions.

This is because even a small corrective move at such a stage could result in a strong selloff in individual stocks. The Nifty Bank index yet again failed to maintain its upside momentum during the first half of the last week. The index took a dip towards 36,500 and then again reached near the 38,000 mark. However, we reiterate our view that till the time, Nifty Bank trades above 36,000 then there is a possibility of new highs towards the 40,000 level. The index traded at 0.95% higher at 38191 at around 10.50 am (IST), while the Nifty index was down 0.10% lower at 17,835.

Stock Recommendations

HDFC Bank | Buy | Stop loss: Rs 1,530 | Target price: Rs 1,720
The stock is yet to clear its lifetime highs similar to its peers. The price action indicates that HDFC Bank could catch in the coming weeks thus making it a lucrative buying candidate.

PVR | Buy | Stop loss: Rs 1,400 | Target price: Rs 1,650
After a range breakout above 1470 level, the stock travelled above 1600 and has now retested the breakout level. Thus traders can go long in it with a given trade set-up.

(The writer is AVP-Technical Research, Anand Rathi Shares and Stock Brokers, views expressed are personal)