5paisa share market strategy for next week | September 6 - 10

Indian stocks had a stellar run last week when Sensex and Nifty rose over 3.5% to scale new highs. Nifty50 recorded its fastest 1000 points upside ever in just 19 trading sessions underlining the exuberance. Most market experts believe that on derivatives front market is not yet overheated. Broader market is likely consolidate with positive momentum bias helped by domestic economic uptrend and as vaccination drive picks up. Ample liquidity in the Indian stock market will also contribute as a driving force.

Sensex and Nifty at new highs

Indian stock markets touched new highs on Friday, with the 30-stock benchmark BSE Sensex crossing 58,000 for the first time as the investor euphoria continues unabated. The new milestone comes barely three days after the Sensex climbed past 57,000 on Tuesday, marking the shortest period for the Sensex to add 1,000 points. The Sensex hit a high of 58,115.69 in morning trade on Friday and ended at 58, 129.95. The National Stock Exchange’s Nifty 50 also created a new record, going past 17,300 for the first time. Nifty ended at 17,323.60.

The Sensex has now soared 126% since crashing to 25,638.90 in March 2020 due to concerns related to the Covid-19 pandemic. The non-stop rally has prompted many analysts to sound a note of caution and warn about a possible correction.

Upcoming IPOs

In the current year so far, funds raised through IPOs have risen about 2.2 times over previous year. As of this week 11 upcoming IPOs are waiting to hit the market to raise over Rs. 11,600 crore. While, about 40 more companies are waiting SEBI approval to raise about Rs. 89,000 crores. Chinese regulatory crackdown in start-up and tech space has also facilitated inflows to Indian capital market, which is contributing to this sustained uptrend in Indian equities.

Indian stock markets give thumbs up to GDP data

Indian stock markets have another reason – health macroeconomic numbers – to stay bullish. India’s gross domestic product (GDP) grew 20.1% in the April-June quarter of 2021-22 from the low base of last year when the country was under a strict lockdown for almost two months to control the Covid-19 pandemic. The GDP had contracted 24.4% in the first quarter of 2020-21, the deepest quarterly contraction India ever recorded. 

The GDP print for the first quarter is on a par with estimates in a Reuters poll of 41 economists, which had projected a 20% expansion. But it was a tad below the Reserve Bank of India’s projection of 21.4%.

According to data released by the National Statistical Office on Tuesday, the real gross value added for Q1 rose 18.8%.

Not only the markets but other macros also showed signs of recovery with the Q1GDP numbers rising in terms of personal consumption, exports and capex albeit on a low base, GST collections surpassing Rs. 1 lakh crore for the second consecutive month and manufacturing PMI data staying in expansionary territory from July.

Midcap, Small cap gains may continue, Bank Nifty in focus

In the broader markets, the BSE Midcap index was 0.44% higher while the BSE SmallCap index gained 0.68%.  Among sectoral indexes, the BSE Auto Index was up 1.4% while BSE Consumer Durables gained 1.2%. The FMCG index was flat, weighed down by losses in Hindustan Unilever share and Nestle share.

Comparatively Bank Nifty underperformed last week. However, market experts believe Bank Nifty index is likely to see some upside in the short-term. Technically our expert believes that bank nifty index needs to close above 37000 then 37,450 and 37,950 levels will become open. The Bank Nifty index will be in focus for rest of this month.

Exclusive 5paisa stock strategies for September

Every Saturday at 11 am 5paisa YouTube channel brings you a live webinar with our stock market expert Dhaval Vyas. He answers your stock queries during the live session. You can watch the live session Next Week's Trading Strategy with 5paisa Expert Dhaval Vyas here https://www.youtube.com/watch?v=bKOm7azT69Q

While he has answered over 60 stock strategies, here we will discuss some of them. You may watch the video to find all the strategies he discussed and plan your weekly strategy better.

SBI share

Many investors have asked us about trading strategy SBI share for the short-term. SBI is India’s largest bank in terms of asset size and bank network and has been a favourite buy for investors in the recent past. In the long-term it remains a buy for sustained wealth creation.

Technical strategy in short term for SBI share

If you look at the short-term, SBI stock faces resistance at around Rs438/440 levels and if the break those levels the next targets are Rs 453 and Rs 461 respectively.  The PSU banking stocks see selective buying and one need to be careful while trading.

CarTrade share

CarTrade share, which made a weak stock market debut two weeks ago is one of the most discussed shares in the investor community. We have received many queries regarding the same on whether to sell or hold the stock. CarTrade, founded in 2009, is a platform for potential buyers and sellers to register and buy and sell used cars as well as new cars. The founder Vinay Sanghi, is a veteran of the secondary car market, having spent a long time with Mahindra First Choice. In India, the used car market is estimated at $27 billion (or over Rs.200,000 crore) and growing 15% annually.

The CarTrade platform runs 2 sub-portals. CarTrade.com caters to the consumers in buying and selling used and new cars. The B2B CarTradeExchange.com helps car dealers source leads and fulfil client requirements using the ecommerce channel more effectively.

Technical strategy in short-term for CarTrade share

As per our expert the selling pressure on the CarTrade share continues and is unlikely to see any big buying soon. Technically unless CarTrade stock crosses Rs 1500 levels we would not see any significant support. Also, there are other fundamental reasons at play.

IRFC share

IRFC share listed on bourses in January 2021 and has since then has moved mostly sidewise and missed the rally many other similar stocks have achieved. There are many investor queries on whether to buy sell or hold.

Indian Railway Finance Corp. (IRFC), registered with RBI as a systemically important NBFC (ND-IFC), is the dedicated market borrowing arm of the Indian Railways (IR). Its primary business is to finance the acquisition of rolling stock, leasing of railway infrastructure assets & national projects of the Government of India and lending to other entities under the Ministry of Railways.

Technical strategy in short-term for IRFC share

The IRFC share has shown sidewise movement for quite some time, we are likely to see similar behaviour in the stocks movement as per technicals. Our expert sees good support at Rs 23 levels and there are high chances once this level is crossed it could reach Rs 24/25 targets. One can sell at Rs 25-27 levels. There is strong resistance at Rs 27. This is not a momentum stock from trading point of view.

HDFC Life Share

HDFC Life Share was in news last week due to its acquisition of Exide Life Insurance. HDFC Life Insurance announced the purchase of the life insurance unit of Exide Industries for a consideration of Rs.6,687 crore or nearly $916 million. The consolidation in the life insurance sector has just started picking up as the large private players look to consolidate their market share through rapid inorganic growth. The idea is to tap an ever-growing insurance market. Life insurance penetration in India is very low at 2.82%.

Strategy for HDFC Life stock

HDFC Life stock is a long-term wealth creator. There may be some immediate selling pressure due to the Exide Life but, but one must avoid short-term view in this stock and aim for at least medium-term investment. Our expert sees Rs 870-890 levels for the stock in 1-2 year period. The stock is currently trading at Rs 734.  Must hold stock. Our expert also recommends investment in ICICI Prudential Life share in the Rs 650 - Rs 670 range with a 1-2 year target of Rs 930 levels.

IOC share short-term technical strategy

Many investors have asked about IOC share for short-term trading. Our expert believes energy stocks will be in focus this week. For IOC the short-term structure looks good, and one may invest or hold with expectation of first target of Rs 116 and second target of Rs 119. The stop loss should be placed at Rs 111.

Stock Market Holiday on Friday

The trading week will be truncated as markets will remain closed on Friday on the occasion of ‘Ganesh Chaturthi’ festival. Among key data - industrial production data will be released on Friday.