Stocks to buy: Indian stock market benchmarks, the Sensex and the Nifty 50, declined by more than one percent each. The Sensex ended the day down by 931 points, or 1.15%, closing at 80,220.72, while the Nifty 50 fell by 309 points, or 1.25%, to finish at 24,472.10.
The mid and small-cap sectors of the market experienced even greater declines. The BSE Midcap index fell by 2.52 percent, while the Smallcap index plummeted by 3.81 percent.
"“Domestic benchmark indices opened flat, reflecting global cues. As a result, the Nifty opened flat to positive, but the index then experienced severe selling pressure and concluded the day on a negative note at 24,472. The volatility index, INDIA VIX, rose 4.21% to 14.34, indicating an increase in market volatility.
On the daily chart, Nifty formed a bearish candle and broke the critical neckline of the head and shoulder pattern, confirming further weakness. The index is currently placed near 100-Days Exponential Moving Average (100-DEMA) support which is placed near 24485. If Nifty sustains below 24,440, then the index could drift toward the 24,200-24,000 levels. On the upside, the previous support level of 24,700 will now act as an immediate resistance for the index," said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd.
On the Bank Nifty outlook, Yedve added, "Bank Nifty began positively, but experienced profit booking after an initial rise, closing lower at 51,257. Technically, on a daily scale, the index formed a bearish candle, indicating weakness. On the downside, the 100-Days Exponential Moving Average (100-DEMA) support is positioned near 51,100, with last week’s low near 51,000. Thus, 51,000-51,100 will offers good support for Bank Nifty in short term. A sustained break below 51,000 could trigger further downside momentum, potentially leading to a more pronounced decline in Bank Nifty.”
Brokerage firm Motilal Oswal has recommended these three stocks - HDFC AMC, State Bank of India and National Alum - to buy this week with decent upside potential.
HDFC AMC is in strong uptrend and trading at life time high territory. Technically the stock gave consolidation breakout on weekly scale after seven weeks and formed a strong bullish candle with noticeable volumes. On daily scale the stock retested the previous breakout zone and managed to hold above 4650 zones. It is perfectly respecting to its 20WEMA and good buying interest is visible across asset management space. Thus looking at the overall chart structure we are recommending to buy the stock with keeping stop loss below 4500 levels on closing basis for a target towards 5100 zones.
SBIN has formed a strong base near 800 zones and gave a consolidation breakout on weekly scale after five weeks. On daily scale the stock has formed Double bottom price pattern which is a bullish reversal pattern and it gave trend line breakout to closed above its 50DEMA. Good resilience is seen in banking sector in spite of market volatility and risk reward ratio is quite favourable at current juncture. Thus we are recommending to buy the stock with keeping stop loss below 790 levels on closing basis for a target towards 880 zones.
Nalco is trading at life time high territory and is in strong outperformer within metal space. Technically the stock gave range breakout on monthly scale after six months while forming higher lows on weekly scale from last few weeks. On daily scale the stock gave fresh range breakout above 225 zones and formed a strong bullish candle with highest daily close. The rising MACD indicator further confirms the upward momentum and thus looking at the overall chart structure we are recommending to buy the stock with keeping stop loss below 218 levels on closing basis for a new life time high target towards 260 zones.
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.
