Sumeet Bagadia of Choice Broking Recommends 2 Stocks To Buy On Monday, 28th Aug

The Sensex fell 365.83 points or 0.56% on Friday to close at 64,886.51, and the Nifty 50 down 120.90 points or 0.62% to close at 19,265.80. The BSE Sensex Next 50 fell 537 points in the broader market, while midcap stocks closed the day down 262 points, while the smallcap index ended the day down 87 points.

The bloodbath in the stock market was influenced by the forthcoming Jackson Hole meeting outcome. The outcome of the ensuing Jackson Hole summit contributed to the massacre of the stock market. Chairman Jerome Powell stated at the Jackson Hole central banking conference in Wyoming on Friday that the US Federal Reserve is prepared to increase interest rates further in order to lower high inflation to the 2% target.

Nifty Prediction

Commenting on the outlook of Nifty, Jatin Gedia - Technical Research Analyst at Sharekhan by BNP Paribas said, "The Nifty opened the gap down on Friday and thereafter witnessed volatile price action throughout the day. It closed in the negative down ~120 points. On the daily charts, we can observe that the selling pressure from the previous trading session continued today as well.

It has reached the 38.2% Fibonacci retracement level 19,245 of the rise from 16,828 - 19,992 which makes it a crucial level to watch out for. On the weekly charts, Nifty has closed negative for the fifth consecutive week which also indicates there is a lack of buying interest. Weekly, daily, and hourly momentum indicators have a negative crossover which is a sell signal. Thus, both price and momentum indicators suggest a continuation of the fall. Overall, we shall continue to maintain our negative outlook on the index for a target of 19,100. Crucial support is placed at 19,200 - 19,180 while immediate hurdle is placed at 19,360 - 19,400."

Bank Nifty Outlook

"The pullback rally in Bank Nifty has fizzled out at the 44,900 - 45,000 zone where resistance in the form of the 50% Fibonacci retracement level was placed. The daily and the hourly momentum indicators provide divergent signals and hence a consolidation is likely. The range of consolidation is likely to be 44,800 - 43,900," said Jatin Gedia on the outlook of Bank Nifty.

Weekly Market Outlook

"Indian indices encountered a week of vulnerability due to adverse global and domestic cues, accompanied by a shift towards safer assets by investors like the USD. Discouraging domestic industrial production, negative wholesale inflation, and elevated CPI inflation contributed to market volatility. Additional strains emerged from stronger-than-expected US retail sales data; adding to Fed rate hike fears, concerns about US bank rating downgrades, and a sudden Chinese central bank rate cut hindered recovery and sustained selling pressure," said Vinod Nair, Head of Research at Geojit Financial services.

"Escalating US bond yields are predicted to restrict foreign investments in India, further impacting market dynamics. With moderate core inflation & transitory July retail CPI data, the market did not foresee a rate hike. The metal sector bore the brunt this week due to sluggish industrial data and concerns about Chinese demand. Investor sentiment remains subdued due to the high volatility of the global currency market, leading to a high depreciation of EM currencies, which affects the performance of equities," Vinod Nair further stated.

Stocks To Buy On Monday

Sumeet Bagadia, Executive Director of Choice Broking has recommended the below stocks to buy on Monday i.e. 28th August.

Torrent Power

TORNTPOWER has revealed a gradual upward movement in the larger time frame, indicating a persistent bullish trend. However, over the past week, the stock has experienced consolidation suggesting a temporary pause. ADX at a level of 26 indicates that the stock is currently in a moderate trend. RSI is positively skewed, indicating a favorable price action among investors potentially supporting the continuation of the upward trend. Furthermore, the increasing delivery volume indicates higher participation and interest from market participants.

One can initiate a long position at cmp 666.3 for the target price of 688. SL can be kept as 653.

Bajaj Finance

Buy BAJFINANCE in cash @ Rs: 7211.50, Stop-loss: Rs 7020, Target: Rs 7530

BAJAJ FINANCE has a strong support range between 7050 and 7150. The stock has recovered from its support levels and is now trading near 7211.50. The RSI indicator is also comfortably trading near 52 levels, indicating strength. The stock has taken support from the middle band and is approaching the upper band, which could be a small resistance near 7360. Once the stock exceeds the previously mentioned levels, it may move towards the 7530 level and above. Currently stock is trading above all the important moving averages indicating strength.

Based on the above-mentioned technical analysis, we recommend purchasing BAJAJ FINANCE at the current market price of 7211.50 with a medium-term target price of 7530. If the price falls below 7020, our analysis will be deemed invalid.

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.