Stock picks of the day: Stay on the long side, Nifty likely to head towards 11,450-11,550

For the entire last week market looked depressed and the way it was grinding towards the recent lows, traders and investors were almost losing all hopes from the market. The Finance Minister tried lot many things in last few weeks to boost the sentiments; but seems she had saved her masterstroke for the right time.

 

On Friday, finally the FM delivered which could lift the sentiments and that has clearly been proven by such a mesmerizing reaction from the market. The buying commenced the moment the FM initiated her speech and it went to a different level for next couple of hours. Finally this became the historical day for our markets as we clocked biggest ever intraday gains to take a giant leap from 10,700.

 

One has to understand that the low hanging fruit is already gone after this colossal rally. But this is not the end of it; there are further legs to unfold from hereon. For Nifty Midcap index, the month of September was the 21st month from January 2018 peak and on last couple of occasions (historically), the downtrend got arrested in 21st and 34th month.

 

As per the Fibonacci series, both 21 and 34 are part of it and hence hold some significance. In addition, for Nifty, last week was the 21st week as per the ‘Time Retracement’ and thus, we were hoping for some respite. Considering this week’s correction, our final hope was the recent low of 10637. Fortunately it remained defended and with Friday’s developments, the market seemed to have validated our hypothesis on ‘Time Retracement’. Now, we have finally managed to thrash the recent sturdy wall of 11200 with some authority.