Day Trading Guide For Monday: Sumeet Bagadia Recommends 2 Stocks To Buy Next Week

On Friday amid flimsy global cues, benchmark indices closed down for the fourth straight session. The Nifty was down 68.00 points or 0.34% at 19,674.30, and the Sensex was down 221.09 points or 0.33% at 66,009.15. The top Nifty gainers were IndusInd Bank, Maruti Suzuki, SBI, M&M and Asian Paint, while the major losers were Wipro, Dr Reddy's Laboratories, UPL, Cipla, and Bajaj Auto. Sensex and Nifty both had weekly declines of over 2% apiece. This week, the Nifty Bank index fell by 3.26% while the Nifty Midcap 100 had a loss of 1.18%.

Weekly Market Outlook

Vinod Nair, Head of Research at Geojit Financial Services believes that "Throughout the week, investor sentiment was plagued by concerns of impending rate hikes driven by inflationary pressures. Rising crude oil prices, attributed to expectations of increased demand in China coupled with supply cuts, contributed to these inflation concerns. Although the Fed chair opted to maintain existing interest rates, the suggestion of potential future rate hikes in response to inflationary pressures led to rising US bond yields and a stronger US dollar, prompting investors to seek refuge in safe-haven investments.

This cast a shadow over the domestic market and displayed a bearish trend. Amid these conditions, PSU bank stocks saw gains, partially due to India's inclusion in JP Morgan's Government Bond Index, which resulted in a decline in bond yields. However, overall, risk-averse sentiment prevailed, driven by the ongoing ascent of US bond yields and concerns regarding the possibility of higher rates persisting for an extended period."

Nifty Outlook

Rupak De, Senior Technical analyst at LKP Securities said, "Nifty experienced consistent selling pressure throughout the week, resulting in a decline of 2.80% from its all-time high. This recent correction has caused it to dip below the critical 21-day Exponential Moving Average (21 EMA). The sentiment appears bearish at this point, with a key support level identified at 19,600. A breach below 19,600 could potentially initiate a more significant market correction. On the upside, 19,800 is expected to serve as a resistance level."

Bank Nifty Outlook

Kunal Shah, Senior Technical & Derivative analyst at LKP Securities said, "The BankNifty index witnessed a significant double top breakdown pattern, which often signals a reversal in trend. This bearish pattern was largely influenced by selling pressure in HDFC Bank.The index breached its 20-day moving average (20 DMA) located at 45,000. A break above this level could trigger some short-covering, but the overall sentiment remains bearish.The prevailing sentiment in the BankNifty index remains bearish. As a result, it's advisable to maintain a "sell on rise" approach. The next immediate support is seen in the 44,500-44,400 range."

Stocks To Buy On Monday

Sumeet Bagadia, Executive Director at Choice Broking has guided with a buy rating on 2 stocks for Monday's trading session.

Maruti Suzuki

Buy MARUTI in cash @ Rs 10535.15, stop-loss: Rs 10215, target: Rs 11000

MARUTI displays an intriguing technical landscape. The critical support level at 10220, closely aligned with the 20-day Exponential Moving Average (EMA), signifies historical buying interest and provides a foundation for the stock's price stability. This level serves as a potential stop for downward movements.

Notably, there's a modest resistance point at 10620, which coincides with the stock's all-time high. If MARUTI can breach this resistance, it opens the door for further upward momentum, possibly propelling it to new all-time highs, surpassing 11000.
The Relative Strength Index (RSI) currently stands at 66, indicating a supportive environment for price gains. It's not yet in overbought territory, suggesting room for further growth.

Crucially, MARUTI is trading above all significant moving averages, emphasizing its underlying strength and positive sentiment.
Based on the above analysis we recommend buying MARUTI at the CMP of 10535.15 with a stop loss of 10215 for the targets of 11000.

Colgate Palmolive India

Buy COLPAL in cash @ Rs 2001.30, stop-loss: Rs 1965, target: Rs 2060

COLPAL has bounced back from the support level of 1980 which is also its 20-Day EMA level; currently the stock is trading around 2001.30 levels. The stock has consolidated in a range of 1980-2020 levels for the last 4 days. Once stock crosses the upper band of the range mentioned the stock can move towards the target of 2060 levels which is also an all-time high level for the stock. The stock is also trading above all its important moving averages indicating strength. The momentum indicator is currently at 57 levels.
Based on the above analysis we expect COLPAL to move higher towards 2060 and hence we recommend buying COLPAL at CMP of 2001.30 with a SL of 1965.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.