IRFC, Tata, Amara Raja: Prabhudas Recommends Buying In 3 Stocks On March 26; Market's This Week Outlook

After a long-weekend, the stock market is set to kick start this week's trading session from March 26th onward. Last week, despite volatility, the stock market edged higher due to favourable global cues which took a boost from the US Federal Reserve's continuation in stance of three rate cuts in upcoming policies of 2024. In the trading week from March 18th to 22nd, Sensex overall gained by 186.15 points or 0.26%, while Nifty jumped by 66.30 points or 0.30%.

On Monday, the market is closed on March 25th due to the Holi festival, while trading will also be closed on March 29 due to Good Friday, and on March 30-31 as they fall on a weekend.

On March 26, the market will see the influence of global trends, foreign funds and domestic funds flow, and midcap and smallcap positionings, and investors will also place their bets with Q4 earnings season in the picture. The IT sector will be in focus as they will be the first ones to declare their Q4 earnings from early April. Last week, the IT sector faced a massive bearish trend as investors dumped their shares after Accenture cut its guidance for the fiscal year, which hinted that overall FY24 will be under pressure. Auto, banking and metal stocks will also be in focus ahead of their operational performance figures.

Amidst this, Shiju Koothupalakkal - Technical Analyst at Prabhudas Lilladher has recommended buying three stocks. These stocks are from diverse segments such as hotels, railways and batteries. Of them, Tata and IRFC are the renowned picks.

Koothupalakkal recommended a buying range, with stop loss and target prices. They are:

- BUY TAJ GVK cmp 343 Stop Loss 335 Target 360.

- BUY AMARA RAJA ENERGY cmp 778 Stop Loss 762 Target 810

- BUY IRFC cmp 140.95 Stop Loss 137 Target 150

On the Nifty spot index, Koothupalakkal expects support and resistance to be around 21,950 and 22,300 respectively. Bank Nifty is expected to find support and resistance on 46,400 and 47,300 respectively.

Last week, on Friday, Sensex closed at 72,831.94, up by 190.75 points or 0.26%. While Nifty 50 surged by 84.80 points or 0.4% before ending at 22,096.75.

For the trading week from March 26th to 28th, Ajit Mishra, SVP - Technical Research, Religare Broking said, "We expect volatility to remain high due to the scheduled expiry of March month derivatives contracts. Besides, participants will continue to take cues from the global indices, especially the US markets, which are moving from strength to strength with every passing week. The major index, the Dow Jones Industrial Average (DJIA) is set to test a new milestone of "40,000" and the support base has shifted to 39,200 in case of any profit taking."

Mishra further added, "The recent rebound in the Nifty can be largely attributed to the favourable global cues however it is still facing a hurdle around the short-term moving average i.e. 20 DEMA. We reiterate our cautious view on Nifty until it decisively reclaims the 22,200 zone otherwise profit taking may resume. On the downside, 21,500-21,800 would continue to offer a cushion. Since we are seeing mixed trends across sectors, participants should focus on stock selection and risk management."

Religare analyst reiterated its preference for index majors & large midcaps and suggests utilizing rebound in the smallcap space to reduce positions.

Also, Vinod Nair, Head of Research, at Geojit Financial Services said, "Amidst mixed signals from global peers, investor sentiment remained volatile, influenced by uncertainties surrounding pivotal policy decisions from major central banks. The unexpected interest rate hike by the BoJ past 17 years and the ECB's choice to maintain rates contributed to subdued market sentiment. However, the market rebounded following the Fed's indication to proceed with three interest rate cuts this year, despite inflation remaining above the long-term target."

Nair lastly said, "The IT sector faced headwinds driven by the global slowdown in spending. Investors redirected attention towards the realty sector, which emerged as the top performer of the week. The bounce is expected to continue in the short term as traders punt to buy when the market is trading at oversold territory. However, concerns persisted regarding inflated valuations in mid and small-cap stocks. And large caps are expected to outperform in the medium term."