F&O Strategy: Buy GMDC, KPIT Tech, HUL suggests Rupak De as Indian stock market begins fresh week with gains

Stock market today: On Monday, the Indian benchmark indices, Sensex and Nifty 50, started the day with a slight rise. This was driven by the increase in IT firm Wipro's stock due to its announcement of a bonus share issue, as well as the uptick in banking and financial stocks. Investors are closely watching the domestic inflation data to gauge when a potential interest rate cut may occur.

At 11:13 IST, the Sensex surged by 494.34 points or 0.61% to reach 81,877.67. Similarly, the Nifty 50 rose by 131.65 points or 0.53% to reach 25,095.90.

In India, the impact of geopolitical uncertainties and the Chinese stimulus is slowing down, according to experts. However, there won't be any quick respite for the markets in the near future because of the impending US presidential election, which is causing volatility across the board.

According to technical analysts in the derivatives segment, Foreign Institutional Investors (FIIs) continue with their net short positions in the index futures with the ratio now around 35 percent. Until we see any signs of short covering by them, the upside in the market could be limited and would see selling pressure at higher levels. The near term trading range for Nifty 50 seen at 24,700-25,250. A breakout on either side should then lead to a directional move.

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, October 9. Bank Nifty struggled to close above its 50-day EMA, indicating bearish control over the index. However, it found support at the 51,000 level, aligning with its rising trendline support. The outlook remains sideways to mildly negative until the index closes above its 50-day EMA, currently placed at 51,700. In the near term, immediate support lies at 51,000, while resistance can be expected around the 51,600 level. Until a decisive move above the 50-day EMA occurs, the index may continue to trade within this range.

Open Interest Analysis: PUT writing was not significant on the 2nd day of the new expiry; while significant CALL writing was visible at 52,000 indicating strong resistance for the short term at 52,000. Maximum CALL open interest is seen at 51,500 and maximum PUT open interest was seen at the 51,000 strike, indicating the range for the near term. CALL writers seen outnumbering PUT writers in the weekly expiry.

Nifty 50

For Nifty 50 the last expiry date was Thursday, October 10. Nifty 50 remained largely subdued on Friday, with traders anticipating India CPI data. On the upside, call writers were active at 25,000, indicating a potential strong resistance level. On the downside, weak support was noted from put writers at 24,900. The overall sentiment stays bearish as long as the index remains below 25,050, while a decisive break below 24,900 could lead to a drop towards 24,700.

Open Interest Analysis: PUT writing was not significant on the first day of the new expiry; while significant CALL writing was visible at 25,000 indicating strong resistance for the short term at 25,000. Maximum CALL and PUT open interest was seen at the 25,000 strike, indicating a possibility of a weekly expiry around 25000. CALL writers seen outnumbering PUT writers in the weekly expiry.

Technical stock recommendations for the week

Buy Gujarat Mineral Development Corporation Ltd (GMDC) at ₹340; Target Price: ₹360/380; Stop Loss at ₹319

On the weekly chart, the stock has recently recovered from a number of significant reversal marks. Furthermore, it established support right before the most recent rise near the 100-week EMA. On the daily chart, a bullish harami reversal pattern is also visible. RSI displays a bullish crossover on a daily basis. On the weekly chart, the stock has recently recovered from a number of significant reversal points. It also found support right before the recent rise at the 100-week EMA. On the daily chart, a bullish harami reversal pattern is also visible. RSI displays a bullish crossover on a daily basis.

With this technical setup, we can infer a positive outlook, potentially reaching 360/380 in the short term. Support is established at 320, and a break below this level would indicate weakness.

Buy KPIT Technologies Ltd at ₹1,789; Target Price: ₹1,920; Stop Loss at ₹1,734

The stock has moved back into a bullish zone by breaking through the rising trendline on the daily timeframe. It maintained above the crucial 100-day moving average, which led to the most recent surge. Additionally, the RSI has broken out of a falling trendline. With this technical setup, we can infer a positive outlook, potentially reaching 1,920 in the short term. Support is established at 1,734, and a break below this level would signal weakness.

Buy Hindustan Unilever Ltd (HUL) at ₹2,783; Target Price: ₹3,050; Stop Loss at ₹2,664

The stock has recently reversed from several key points on the daily chart. Additionally, it found support just above the 100-day EMA before the recent rally. A strong hidden bullish divergence is visible on the daily timeframe. With this technical setup, we can infer a positive outlook, potentially reaching 3,050 in the short to medium term. Support is placed at 2,664 (on a closing basis), and a break below this level would signal weakness.

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.