Trade Call: 2 Stock Picks By Sumeet Bagadia For Monday, 19th Feb

Due to robust buying in banking stocks on Friday, the Nifty closes the week on a positive note for the second straight week. On February 16, Indian benchmark indices concluded the day higher for the fourth straight day. The Nifty surged 129.90 points or 0.59 per cent to close at 22,040.70, while the Sensex gained 376.26 points or 0.52 per cent to settle at 72,426.64. Nifty recorded its second consecutive week of weekly advances as a consequence.

With an outstanding 1.19% rise at the end of the trading week, Nifty showed a noticeably bullish trend. The Indian market is anticipated to be turbulent next week, and range bound extension of key indices is anticipated ahead, despite investors' keen attention to the US Federal Reserve's decision concerning interest rates.

Market Outlook

"On the daily charts, we can observe that the Nifty has been rising since the last three trading sessions and in the process has rallied ~530 points during this time frame. It is now approaching the upper boundary placed in the zone of 22100 - 22150 where it has faced resistance on two occasions which increases its importance.

The steep rise in the last three trading sessions is losing momentum and is evident on the hourly momentum indicator which is on the verge of a negative crossover. Overall, we are expecting the range-bound action to continue. The inability to decisively cross the recent swing high of 22150 can lead to a fall in the Nifty and hence caution is advised," said Jatin Gedia - Technical Research Analyst at Sharekhan by BNP Paribas.

"Bank Nifty has reached the daily upper Bollinger band (46550) and is witnessing some resistance which could lead to a dip in the coming trading session, however, it should be used as a buying opportunity as the overall pullback is not complete. On the upside, we expect levels of 47000 - 47200 from short-term perspective," the analyst further added.

Stocks To Buy On Monday

Sumeet Bagadia, Executive Director of Choice Broking, recommended purchasing shares of L&T Finance Holdings and Archean Chemical Industries on Monday, February 19.

Archean Chemical Industries

Buy ACI in cash @ Rs 657, stop-loss: Rs 635, target: Rs 694

ACI, available for purchase at Rs 657 in cash transactions, presents a compelling opportunity in the technical realm. The Relative Strength Index (RSI) is currently at 62, indicating a favourable market sentiment. Additionally, the stock has formed a technical pattern known as an inverted head and shoulders, suggesting potential upside in the stock price.

The inverted head and shoulders pattern typically signifies a bullish reversal, with the recent price action indicating a potential upward movement. Investors are advised to consider buying ACI, with a stop-loss set at Rs 635 to manage potential downside risks.

In conclusion, ACI's technical analysis, including the RSI reading and the formation of the inverted head and shoulders pattern, indicates a promising buying opportunity. By entering the market with caution and setting a suitable stop-loss, investors can position themselves to benefit from potential gains in ACI's stock price.

L&T Finance Holdings

Buy L_TFH in cash @ Rs 173.80, stop-loss @ Rs 168, target @ Rs 183

L&T Finance Holdings (L_TFH), presently trading at 173.80 levels, has exhibited a robust upward movement following the establishment of a support base in the range of 168-170 levels. This foundational consolidation suggests a period of price discovery and sets the stage for potential upward momentum.

The stock's strength is further emphasized by its positioning above key moving averages - the short-term (20 Day), medium-term (50 Day), and long-term (200 Day) Exponential Moving Averages (EMA). This alignment underscores the stock's positive trajectory and sustained bullish sentiment.

The momentum indicator, Relative Strength Index (RSI), currently at 57.23 levels, is on an upward trajectory, indicating growing strength in the stock. This, combined with the overall positive technical setup, suggests potential for further upside.

On the daily chart, a minor resistance is observed around 178 levels. A successful breakthrough of this resistance could pave the way for the stock to move higher towards the target price of 183 and potentially beyond. Based on the above analysis we recommend buying L_TFH at CMP of 173.80 with a stop loss of 168 for the target of 183.

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.