Market Maverick Sudeep Shah Pinpoints Overbought Stocks While Eyeing Nifty Auto's Historic September Ascent!

In the dynamic world of Indian equities, investors are constantly seeking an edge. This week, Sudeep Shah, the Head of Technical & Derivatives Research at SBI Securities, has delivered a comprehensive analysis, identifying key trends and potential shifts that could shape portfolios in the coming weeks.

His insights offer a crucial compass for navigating the market's currents, highlighting both areas of caution and significant opportunity.

Shah's sharp eye has detected 'overbought' signals in two prominent stocks: Hindustan Petroleum Corporation (HPCL) and Tata Motors. Utilizing powerful technical indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), Shah suggests that these stocks might be ripe for a correction or consolidation after their recent rallies.

For HPCL, he advises a cautious approach, hinting at a potential retracement towards the Rs 230 mark. Meanwhile, Tata Motors, after its robust upward trajectory, appears to be entering a consolidation phase. Shah notes strong resistance around the Rs 645-650 levels, with robust support positioned at Rs 605-610.

His recommendation for Tata Motors is clear: consider fresh buying only if the stock decisively closes above Rs 650, signalling renewed momentum.

While caution is the watchword for certain individual stocks, Shah's outlook for the Nifty Auto index is decidedly bullish. He forecasts that this key sectoral index is on track to achieve an unprecedented record high in September.

This optimism stems from the Nifty Auto index's exceptional relative strength compared to the broader market and its recent breakout from a period of consolidation. Investors looking to capitalize on this anticipated surge might consider keeping a close watch on leading auto sector players such as Bajaj Auto, Ashok Leyland, and TVS Motor, which are well-positioned to benefit from this sectoral tailwind.

Turning to the broader market benchmarks, Shah provides critical support and resistance levels for both the Nifty 50 and Bank Nifty.

For the bellwether Nifty 50, he identifies strong support in the 19,300-19,350 range, suggesting that dips into this zone could present buying opportunities. Resistance for the Nifty 50 is seen between 19,550-19,600, a level that bulls will need to conquer to propel the index higher. Similarly, the Bank Nifty finds crucial support at 44,000-43,900, while facing resistance in the 44,700-44,800 band.

Shah's analysis reinforces an overall positive market sentiment, advocating for a 'buy on dips' strategy, especially given the underlying strength in select sectors. This detailed technical roadmap from Sudeep Shah offers invaluable guidance for investors aiming to make informed decisions in the current market environment.