Nifty Nears Key Resistance: Caution Ahead with Strategic Buys in BEPL and SONACOMS 20 August 2024

Mixed Market Signals: Key Levels for Nifty and High-Potential Trades in BEPL and SONACOMS

August 19, 2024
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Here’s a summary of the market analysis and trading strategies you’ve provided:

Nifty Analysis

Current Position: Nifty is trading above its 20-day EMA on the daily timeframe, and it’s almost 13% away from its 20-month EMA.
Proximity to Highs: Nifty is now just 2% away from its all-time high and the current month’s high, indicating that caution is necessary.
Market Behavior: Despite a gap-up opening, Nifty closed the day flat at 24,500, with a 0.50% intraday loss.
Sector Performance: Sectors like Nifty Fin Service, Nifty Auto, Nifty Pvt Bank, and Nifty Consumption closed the day with losses, while others gained.
RSI Levels:
Daily: 55
Weekly: 70
Monthly: 77
Note: Nifty remains overbought on the weekly and monthly timeframes but may be considered for buying on dips for intraday trading.

Support and Resistance Levels

Nifty:
Support: 24,470 and 24,400
Resistance: 24,650 and 24,730
Bank Nifty:
Support: 50,150 and 49,700
Resistance: 50,480 and 50,750

Global Market Cues

Asian Markets: Mixed signals with Nikkei 225 down by -1.80% and KOSPI down by -0.86%, while other markets were trading with a positive bias. Gift Nifty traded flat.

Trading Strategies

BEPL (Bhansali Engineering Polymers Limited):

Buy Range: ₹150-155
Targets: ₹170, ₹175, ₹182, ₹190, ₹200
Stop Loss: ₹131
Holding Period: 4 to 15 weeks

SONACOMS (Sona BLW Precision Forgings Ltd.):

Buy Range: ₹680-690
Targets: ₹710, ₹745, ₹790, ₹815
Stop Loss: ₹640
Holding Period: 1 to 25 days

This analysis suggests a cautious approach to the market, particularly with Nifty nearing key resistance levels and maintaining an overbought status on longer timeframes. The suggested trading strategies in BEPL and SONACOMS could potentially capitalize on expected movements within their respective ranges.

Disclaimer: V.L.A. Ambala emphasizes that these recommendations are based on price movement, past behavior, and technical analysis. Stay cautious and keep an eye on key levels and upcoming budget announcements to adjust your strategies accordingly.

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More about the author: Vijay Laxmi, aka VLA Ambala, is a SEBI registered Research Analyst, and her research and views are published on various media platforms. Check here – https://smtstockmarkettoday.com/pr-and-media/

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This analysis and recommendations are provided by SEBI registered research analyst VLA Ambala.