Buy or sell: From ONGC to SBI — Ganesh Dongre recommends three stocks for Monday

Buy or sell: As discussed last week, both the Nifty and Bank Nifty indices were in overbought conditions, resulting in a significant correction over the past week. The Nifty index dropped by nearly 5%, closing at 25,014, while the Bank Nifty corrected by about 6%, ending at 51,462.

The Federal Reserve's decision to cut interest rates by half a percentage point had initially caused a strong upward movement in the market, reflecting optimism about the Fed’s progress in controlling inflation. This, in turn, boosted investor confidence. However, the market’s sentiment shifted as geopolitical tensions between Israel and Iran, combined with SEBI’s tighter rules on the derivatives market, prompted traders to focus on profit booking.

Weekly Trading Overview

The week started with a gap-down opening for Nifty as the index tested the 26,400-resistance zone. Continuous profit booking was observed throughout the week, and the Nifty eventually closed near the 24,800-25,000-support zone. The critical near-term support stands at 24,900, aligning with the previous month's low. A further correction may occur if the Nifty falls below the 24,800-24,900 zone in the coming week, potentially driving the index toward 24,000 level. Key support for the week is placed at 24,800, while resistance is at 25,700. If the index manages a sustainable close above the 25,700-25,800 level, it could lead to an upward trajectory.

Bank Nifty Performance

In line with the broader Nifty index, Bank Nifty has also been bearish. The index, which was in overbought territory last week, saw a correction toward its major support zone of 52,000. It opened with a gap-down on Monday and faced continuous selling pressure until it hit this support level. If Bank Nifty sustains below 52,000 on a daily closing basis, further correction toward 50,000 is likely. The immediate resistance for Bank Nifty is at 53,000, which is the previous weekly high, while key support stands at 50,000. A cautious stance is advised if the index closes below 52,000.

Conclusion

Both the Nifty and Bank Nifty indices have managed to close above their respective monthly support zones, despite initial market volatility, maintaining a generally bullish bias. Investors are advised to closely monitor key support and resistance levels as they evaluate trading opportunities in the forthcoming sessions.

Stocks to buy on Monday

1] ONGC: Buy at ₹290-295 | Target Price: ₹315 | Stop Loss: ₹280

2] SBI: Buy at ₹790-795 | Target Price: ₹815 | Stop Loss: ₹775

3] Aurobindo Pharma: Buy at ₹1465 | Target Price: ₹1535 | Stop Loss: ₹1410

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.