Buy or sell stocks: Despite market volatility, India's benchmark Nifty 50 broke its four-week losing streak, ending last week with a modest gain of approximately 0.51 per cent. However, on a monthly scale, October witnessed the steepest selloff since the COVID-19 crash of March 2020, marking a turbulent turn in the markets. Strong foreign capital outflow, weak Q2 earnings and heightened geopolitical tensions were the main triggers behind the market selloff.
On Muhurat Day on November 1, the Nifty 50 rose 0.41 per cent to close at 24,304.35. At this juncture, the index is down 7.5 per cent from its all-time high of 26,277.35 on September 27.
Sumeet Bagadia, Executive Director at Choice Broking, believes that the overall trend for the Indian stock market is cautious. The trend may weaken if the index breaks below the psychological level of 24,000.
A decisive breakdown below 24,000 would mean sharp selling pressure for the index, and the frontline index may go down to the 23,450 to 23,400 range. On the upper side, Dalal Street bias may improve if the index breaks above 24,500 decisively, said Bagadia.
Regarding stocks to buy today, Sumeet Bagadia recommended buying these three shares on Monday: ONGC, Mahindra and Mahindra and Aditya Birla Fashion and Retail (ABFRL).
The ONGC stock chart shows some signs of recovery, but it’s still in a downtrend.
Currently priced around ₹271.75, the recent rise from the support levels at ₹255 follows a long period of decline, hinting that things could improve if more buyers continue to support the stock.
ONGC is still trading below its major moving averages: the 20-day, 50-day and 100-day EMA (exponential moving average).
Being below these levels usually signals a bearish trend, but if the stock closes above them, it might show the beginning of a turnaround.
A close above the 20-day EMA would be a positive sign, and crossing the 50-day EMA would further strengthen this. However, the stock may struggle to go higher if it stays below these points.
The recent low, around ₹260, is acting as a support level, where some buyers are stepping in.
"If ONGC falls below this support, it could continue its downtrend. But if it breaks above the resistance at the 20-day and 50-day EMAs, it might move toward ₹290, which would be a stronger recovery sign. A suggested stop loss could be placed at ₹261 to limit downside risk, while the target is set at ₹290, aligning with the resistance level near the 50-day EMA," said Bagadia.
The stock chart shows signs of potential upward momentum. After a recent pullback, the stock is currently trading around ₹2,817.65.
However, it is currently trading below its 20-day and 50-day EMAs, indicating that it needs to overcome these moving averages to signal a strong recovery.
A breakout above these levels would support a bullish move toward the target of ₹3,000.
Adding to the positive momentum, there has been a slight increase in trading volume, indicating growing market interest.
"If the price sustains above the 20-day and 50-day EMAs, it could strengthen the bullish case for a move toward ₹3,000. Traders should watch for volume spikes and price action near these EMAs for confirmation. New investors may look for buying opportunities near ₹2,800, with a stop-loss at ₹2,715. A breakout above the resistance from the EMA ₹2,888 would strengthen the case for short-term gains, potentially leading to a target of ₹3,000 in the coming sessions," said Bagadia.
ABFRL recently bounced back from support near ₹295, close to its 200-day EMA. This indicates the stock's ability to maintain stability at these levels.
There's a minor resistance near the ₹320 level, which aligns closely with its 20-day EMA. This level can act as a short-term barrier, where the price might consolidate or face selling pressure if the resistance holds.
A breakthrough above this point might trigger further gains towards the target of ₹335 and potentially higher.
The Relative Strength Index (RSI) stands at 45.30, suggesting moderate strength without reaching overbought conditions. This leaves room for potential momentum building in the stock.
"Overall, the ABFRL trend is seen as sideways to bullish, and it is supported by various technical indicators, reinforcing a positive sentiment. To capitalise on potential price retracements, it could be wise to consider buying at the current market price, particularly around ₹314. Implementing a stop loss at ₹300 is advisable to manage risks effectively and safeguard investments against unexpected market shifts," Bagadia said.
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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.
