Trade Call: 2 Stock Picks By Sumeet Bagadia On Wednesday, 21st Feb

The Nifty continued its upward trend on Tuesday, closing higher for the sixth day in a row on strong buying in banking stocks. The Nifty began the day down at 22,099, nevertheless, the index showed resilience in the last deals, rising to a new record high of 22,197, up 0.34%. On the other hand, the Sensex closed at 73,057.40, up 349.24 points (0.48%).

Hero MotoCorp, Coal India, Bajaj Auto, Eicher Motors, and TCS were the primary losers, while Power Grid Corporation, HDFC Bank, Axis Bank, NTPC, and Kotak Mahindra Bank were the major winners. Sectoral indices ended on a mixed note as the IT sector followed by auto and metal sectors were the top losers while the most upward trend was seen in media followed by bank and realty sectors.

Nifty Outlook

"The Nifty continues its upward momentum following a consolidation breakout on the daily chart. The trend remains robust as it has sustained itself both above the psychological level of 22000 and the 21EMA on the daily timeframe. On the higher end, it may move towards 22400/22600 once the index decisively surpasses the 22200 mark. Support on the lower end is identified at 22000," said Rupak De, Senior Technical Analyst, LKP Securities.

Nifty Breaks Out From Its Previous Highs

According to Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities, the Foreign Portfolio Investors (FPIs) Long-Short ratio rose from 38.24% on 16th February to 39.25% on 19th February as the FPI's continued to build long positions in Index futures for the second consecutive day.

The put writers (Bulls) further strengthened their position at the 22,000 Strike on Tuesday. The 22,100 Strike saw a good battle between the call (Bears) & put writers, which kept the Nifty choppy on Intraday basis in the first half. A follow up buying from the current level can accelerate the momentum, which can take the Index even higher. The option activity at 22,200 Strike will provide cues about Nifty's Intraday direction today.

Bank Nifty rose steadily throughout the day to close at 47,094, up 559 points. The put writers (Bulls) created pressure on the call writers (Bears) at the 47,000 Strike in Bank Nifty. The Bulls also dethroned the Bears from the 47,000 Strike. Bank Nifty is likely to move higher if more call writers' exit happen at 47,000 Strike ahead of the weekly expiry today.

Nifty at new peak: Fear gauge too ends higher

Om Mehra, Technical Analyst, SAMCO Securities said the ongoing firm trend in the Nifty persisted Tuesday as it closed in the green for the 6th consecutive day. The Nifty opened lower at 22,099 and soon found itself under selling pressure. However, the index recovered with a strength during closing trades, reaching a fresh record high of 22,197, gaining 0.34%.

The daily bullish candle confirms the strong outlook while the hourly chart, with higher highs and higher lows, suggests that the primary trend remains strong. The next rally would likely attempt to reach the 22,300-22,350 zone. However, the India VIX, the fear gauge, ended higher and closed at 16.07 level.

The Bank Nifty closed at 47,094.20, edging higher by 1.20%. The index remained bullish after crossing and sustaining the resistance of 46,600, now marked as important support. A close above 47,200 would trigger further upswing. Bank Nifty is currently holding strong support of the 20 SMA as well. In Tuesday's session, the major push came from HDFC Bank, rising by 2.63%. The Nifty PSU Bank index remained sideways yesterday, but it has strong support around the 7,050 level, which could drive Bank Nifty closer to its all-time high of 48,636.45.

Stocks To Buy Today

Sumeet Bagadia, Executive Director of Choice Broking, recommended buying shares of Swan Energy and Gulf Oil Lubricants India on Wednesday, February 21.

Gulf Oil Lubricants India

Buy GULFOILLUB in cash @ Rs 941.8, stop-loss @ Rs 921, target @ Rs 1005

GULFOILLUB is exhibiting strong bullish momentum, currently trading at a 52-week high of 957 levels. The recent breakout above the crucial resistance at 920 levels is a significant technical development, supported by robust trading volumes, reinforcing the strength in the stock. The breakthrough suggests a potential continuation of the upward trend, offering an optimistic outlook for investors.

Additionally, GULFOILLUB is trading above key moving averages, including the short-term (20 Day), medium-term (50 Day), and long-term (200 Day) EMAs, further affirming its bullish stance. The momentum indicator, Relative Strength Index (RSI), is at 70 levels.

For traders, keeping an eye on the strong support near 920 levels is advisable, as a breach of this level could signal a shift in sentiment. Overall, GULFOILLUB current technical setup suggests a favourable environment for further upside potential, provided traders and investors remain vigilant to potential reversals and closely monitor key support and resistance levels.

Based on the above analysis we recommend buying GULFOILLUB and the CMP of 941.8 with a stop loss of 921 for the target of 1005.

Swan Energy

Buy SWANENERGY in cash @ Rs 751.30, stop-loss @ Rs 737, target @ Rs 790

SWANENERGY is currently trading at Rs 751.30, displaying a strong bullish trend. The stock is trading above key exponential moving averages (EMAs), including the 20-day, 50-day, 100-day, and 200-day EMAs, indicating a positive sentiment in the market towards SWANENERGY.

The Relative Strength Index (RSI) is at 70, suggesting that the stock may be slightly overbought in the short term. However, this alone does not indicate an immediate reversal, especially given the strong bullish trend.

The chart for SWANENERGY shows a bullish candlestick pattern and a consistent pattern of higher highs and higher lows. This pattern is indicative of a strong uptrend and suggests that the stock is likely to continue moving upwards.
A buying opportunity is presented for SWANENERGY at the current price of Rs 751.30, with a stop-loss set at Rs 737 and a target price of Rs 790. This trade setup offers a favourable risk-reward ratio, with the potential for significant upside.

In conclusion, SWANENERGY is currently displaying strong bullish momentum, supported by its technical indicators and chart pattern. Investors looking to capitalize on this trend may consider buying SWANENERGY with a prudent risk management strategy in place.

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.