Buy or sell stocks: Discounting the geopolitical risk after an escalation in the Russia-Ukraine war, the Indian stock market witnessed a significant broad-based rally from the oversold territory on Friday. The Nifty 50 index registered the best single-day gain in the last five months and finished 525 points higher at 23,875. The BSE Sensex shot up 1807 points and closed at 78,963, whereas the Bank Nifty index ended 716 points higher at 51,089. Cash market volumes inched up to ₹1.01 lakh crore. The broad market indices rose less than the Nifty 50 index even as the advance-decline ratio rose sharply.
Sumeet Bagadia, Executive Director at Choice Broking, believes the Indian stock market bias has improved after the pullback rally on Friday as the Nifty 50 index closed above the 23,700 mark. The Choice Broking expert said the uptrend may continue, and the 50-stock index may touch the 24,350 to 24,400 range in the subsequent few sessions. Sumeet Bagadia recommended buying these three shares: Godrej Properties, State Bank of India (SBI), and ITC to maximise this rally.
1] ITC: Buy at ₹474.65, target ₹520, stop loss ₹452.
ITC share price is currently trading at ₹474.65 and is on the verge of breaking out of a falling trendline on the daily chart, accompanied by a notable increase in trading volume. This potential breakout suggests the possibility of further upward momentum. The stock has rebounded strongly from its support zone and has surpassed its long-term (200-day) exponential moving average (EMA). Additionally, ITC is trading near its short-term (20-day) EMA, indicating a strengthening bullish sentiment. These technical developments point to the potential for continued gains provided it sustains above-critical levels and maintains buying interest.
The Relative Strength Index (RSI) recently gave a positive crossover at lower levels and is currently at 45.57, signalling potential upward momentum and indicating that the stock may be gaining strength for a move higher. If ITC holds above the ₹490 level, it could advance toward a higher price target of ₹520.
Considering the technical indicators and intense price action, entering a long position in ITC at ₹474.65 presents a promising opportunity. With a well-defined stop loss at ₹452 and a target price of ₹520, this trade offers a favourable risk-reward ratio and aligns well with the bullish sentiment surrounding the stock.
2] SBI: Buy at ₹816.05, target ₹892, stop loss ₹778.
SBI share price is currently trading at ₹816.05. After reaching its record high, the stock began consolidating, trading within a defined range. Recently, it found support near its demand zone and has shown signs of reversal by bouncing back from key support levels. This movement indicates strengthening bullish momentum and a potential shift in trend. If SBIN sustains above the critical level of ₹825, it could gain further traction and move toward the ₹870 to ₹890 range.
The RSI is currently at 50.42 and has reversed from lower levels. It trades at a level where buyers are likely to show interest, indicating potential buying momentum in the stock. Furthermore, SBIN has rebounded from its long-term (200-day) exponential moving average (EMA) and has moved above its short-term (20-day) and medium-term (50-day) EMA levels. This indicates strengthening bullish momentum and suggests that the stock is regaining upward traction, with these moving averages providing additional support for its positive outlook.
Considering the current technical indicators and price action, SBI share appears well-positioned for a potential upward move at current levels. Investors may consider buying at ₹816.05, with a stop loss set at ₹778 to manage risk. The target price of ₹892 aligns with key resistance levels and offers a favourable risk-reward ratio, making this a promising trading opportunity.
3] Godrej Properties: Buy at ₹2857.15, target ₹3150, stop loss ₹2430.
Godrej Properties' share price is trading at ₹2857.15 and has recently broken out of a falling parallel channel, signalling a potential continuation of its bullish trend. The stock has rebounded from the support zone, corresponding to the lower range of the falling parallel channel, indicating a reversal from a critical level.
Additionally, the stock has formed a strong bullish candle, accompanied by a significant increase in trading volume, highlighting robust momentum and buyer interest. If the stock sustains above the ₹2900 level, it will likely extend its uptrend toward a target of ₹3150.
The Relative Strength Index (RSI) is trending upward and currently stands at 52.64, supporting a positive outlook. Moreover, Godrej Properties share has surpassed both its short-term (20-day) and long-term (200-day) exponential moving averages (EMAs), further reinforcing the bullish sentiment.
Given these technical indicators, a long position in Godrej Properties shares at ₹2857.15 is recommended. Setting a stop-loss at ₹2730 and a target price of ₹3150 aligns well with the recent breakout momentum and the prevailing positive market sentiment, offering an attractive risk-reward ratio.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
