F&O Strategy: Buy DLF, TCS, LTIMindtree, recommends Rupak De as Indian stock market hits record high

Stock market today: On Monday, September 2, the domestic benchmark indices, the Nifty 50 and Sensex, started at their all-time highs, driven by gains in Asian markets and the strength of information technology companies. Investor confidence was fueled by expectations of a potential interest rate decrease in the US in September.

The Nifty 50 index opened 0.39% up at a record high of 25,334.40 points, while the Sensex began 0.45% higher at 82,732.95.

Although the indices retreated from their peak levels in mid-morning trading on Monday, they remained elevated, supported by consumer goods and information technology stocks boosting the benchmarks.

Market analysts indicated that market volatility is anticipated this week. The US August payrolls data, including revised figures for the previous two months, will be a key market driver and is scheduled for release at the week's end.

A technical analyst stated that foreign institutional investors (FIIs) have started the September series on an optimistic note and has around 72% positions in the index futures on the long side. In options segment, put writing is seem in the weekly series and hence, overall data seems positive. They continue with their bullish view on the market with possible near term target around 25,400 for Nifty 50.

Technical views by Rupak De, Senior Technical Analyst, LKP Securities on F&O market

Bank Nifty

For Bank Nifty the last expiry date was Wednesday, August 28. The Bank Nifty continues to remain in a sideways mode as the index failed to move beyond 51,500. However, the short-term trend remains positive, with the index closing above the important 21-day EMA. The RSI is in a bullish crossover. In the short term, the index might continue to consolidate within the range of 51,000–51,500. On the downside, a fall below 51,000 could trigger a market correction. Conversely, a decisive move above 51,500 might lead to a rally towards 52,000–52,500.

Open Interest Analysis:PUT writers added substantial positions at the 51,400 and 50,800 strikes on Friday; whiles CALL writers added substantial positions at the 51,400 and 51,500 strikes. Maximum CALL open interest is seen at 51500 and maximum PUT open interest was seen at the 51,000 strikes, indicating a range bound trading in the near term. Currently the CALL writers are slightly out numbering the PUT writers for current weekly expiry.

Nifty 50

For Nifty 50 the last expiry date was Thursday, August 29. On the daily timeframe, the index has achieved a swing high breakout, indicating increased optimism. Market strength is likely to continue as long as the index stays above 25,000. A decline below this level could trigger a significant correction. On the upside, the prevailing optimism could drive the index toward 25,500 in the near term.

Open Interest Analysis:PUT writers added significant positions at 25,000 strikes; whiles no significant CALL writing was visible. Maximum PUT open interest was seen at the 25,200-strike followed by 25,000, whereas maximum CALL open interest was seen at 25,700, followed by 25,500, indicating a broader range for the market. Both PUT and CALL writers remained equally active in the weekly expiry.

Technical stock recommendations for the week

Buy DLF Ltd at ₹845; Target Price: ₹860/880; Stop Loss at ₹828

The stock has moved up following the formation of a hammer pattern on the daily timeframe. Additionally, it has formed a higher bottom on the daily chart, indicating increased optimism. On the lower timeframe, the RSI has entered a bullish crossover. In the short term, the stock could move towards ₹860-880, with support on the lower end at ₹828.

Buy Tata Consultancy Services (TCS) at ₹4,520-4,560; Target Price: ₹4,700/4,780; Stop Loss at ₹4,440

TCS, a large-cap stock in the IT sector, displays a bullish outlook across multiple time frames. On the daily chart, after a breakout, the stock is consolidating at higher levels and recently closed at its resistance level, indicating strong market interest. It is sustaining above its short-term 14-day EMA, highlighting the strength in momentum. Additionally, the RSI shows a bullish crossover, further supporting the positive sentiment. Considering these factors, one can consider buying TCS at ₹4,520-4560, with a stop loss of 4,440 and a target of 4,700/4,780.

Buy LTIMindtree Ltd at ₹6,100-6,150; Target Price: ₹6,500; Stop Loss at ₹5,850

After correcting from its high, the stock stabilised at the 78% Fibonacci level and recently broke out from a cup and handle pattern, signaling a potential move towards 6,500 levels. The RSI has shown a bullish crossover, indicating strong momentum. This breakout suggests further upside, and any pullback that retests the resistance should be viewed as a buying opportunity. With a target of ₹6,500, traders can consider entering the stock with a stop loss at ₹5,850 to manage risk effectively.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.