SBI Securities Picks City Union Bank, Belrise Industries; Nifty, Bank Nifty Surge to New Highs

Market Outlook:

The benchmark index Nifty has shown a strong recovery, bouncing back from the 25300–25330 support zone, which is reinforced by the 50-day Exponential Moving Average (EMA) and a Fibonacci retracement level. The index gained approximately 700 points from its recent low within five sessions. Following a gap-down opening and sideways movement, a sharp surge in the final hour, partly influenced by positive election results, pushed Nifty above 25900, marking a 1.64% gain for the week and forming a bullish candle. Both Nifty Midcap 100 and Bank Nifty reached fresh all-time highs. Nifty is trading above key moving averages, with bullish RSI readings, suggesting potential upside towards 26200 and then 26500. The 25700–25650 zone acts as immediate support. Key sectors expected to perform well include Private Banks, PSU Banks, Financial Services, Defence, Automobiles, Oil & Gas, Capital Markets, Infrastructure, and Pharma.

Bank Nifty View:

After weeks of consolidation, Bank Nifty has decisively broken out, reaching a new all-time high above 58500. The weekly chart shows a significant bullish candle. The index is trading above upward-aligned moving averages, with supportive momentum indicators like daily and weekly RSI in positive territory and a rising weekly MACD histogram. Resistance is seen around 58700–58800, with a sustained close above this level potentially leading to targets of 59500 and 60200. The 57800–57700 zone is a crucial support area.

Stock Recommendations:

1. City Union Bank: The stock has executed a bullish Flag breakout on the daily chart, validated by increasing volumes. The upward-trending MACD slope and its position above key moving averages indicate sustained bullish momentum. Closing near the upper Bollinger Band suggests strong buying pressure. Recommended to accumulate between 271-268 with a stop loss at 258. Short-term target is 290.

2. Belrise Industries: Belrise Industries has broken out of its consolidation range (143–158) with strong volumes, indicating renewed buying interest. The stock has closed above the upper Bollinger Band for two consecutive sessions, showing strong upside momentum. The RSI at 69.27 and rising MACD histogram bars further confirm bullish strength. Recommended to accumulate between 165-163 with a stop loss at 156. Short-term target is 175.

Impact:

This news has a high impact (8/10) on the Indian stock market as it provides expert-driven stock recommendations and technical outlooks for key indices, influencing investor sentiment and trading decisions.

Definitions:

• Nifty: A benchmark stock market index in India representing the weighted average of 50 of the largest Indian companies listed on the National Stock Exchange of India (NSE).
• Bank Nifty: A sector-specific index on the NSE comprising the most liquid and capitalised banking stocks.
• Exponential Moving Average (EMA): A type of moving average that places a greater weight and significance on the most recent data points. It is used to identify trends and smooth out price data.
• Fibonacci retracement: A technical analysis tool used to identify potential support and resistance levels based on the idea that markets retrace a predictable portion of a prior move.
• Bullish candle: A candlestick pattern that indicates the price of an asset has risen over the reporting period.
• RSI (Relative Strength Index): A momentum indicator that measures the speed and change of price movements. It is calculated on a scale of 0 to 100.
• MACD (Moving Average Convergence Divergence): A trend-following momentum indicator that shows the relationship between two moving averages of a stock’s price.
• MACD histogram: The difference between the MACD line and the signal line, used to indicate the strength of momentum.
• Bollinger Band: A technical analysis tool consisting of three lines plotted in relation to a security's price: a simple moving average (SMA) and two outer bands placed at a standard deviation away from the SMA.
• Flag breakout: A chart pattern indicating a strong upward price move followed by a brief consolidation, suggesting the potential for a continuation of the upward trend.