Trade Call: 2 Technical Stock Picks By Sumeet Bagadia On Monday, 26th Feb

In the face of robust global cues on Friday triggered by NVIDIA's strong earnings report, the Nifty started the day higher but closed at 22,213, down 5 points, after trading sideways in a narrow range all day. Nifty moved in a narrow range and finished nearly flat at 22,212.70 after having a strong beginning and reaching a new high of 22,297.50. In contrast, the Sensex closed at 73,142.80, down 15.45 points, or 0.021 per cent. Sensex gained 1.13% for the week, while Nifty finished 0.64% higher. The market is expected to be volatile this week due to the publication of global economic data, US Q4 GDP, PCE statistics, and monthly auto sales data.

Nifty Remains Range Bound After Attaining New Highs

According to Mr. Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities, the Foreign Portfolio Investors (FPIs) Long-Short ratio rose from 42.33% on 21st February to 44.29% on 22nd February as the FPIs continued to build long positions steadily in Index futures for the fifth consecutive day.

Strong call writing (Bears presence) was observed at the 22,300 Strike in Nifty. Both the call & put writers (Bears and Bulls) battled out at 22,250 Strike leading to the Index trading in a narrow range. The 22,200 Strike saw significant put writing (Bulls entry) additions. The option activity at 22,200 Strike will provide cues about Nifty's Intraday direction on Monday, he said.

Bank Nifty traded sideways to down and closed 108 points lower at 46,812. The call & put writers (Bears and Bulls) battled out at 47,000 Strike in the Index with the bears leading the bulls by a good margin at market close. Bank Nifty is unlikely to move up unless call writers (Bears) exit from the 47,000 Strike, Ashwin Ramani further added.

Technical Indicators Suggest Strong Support For Nifty At 22K

According to Mr. Om Mehra, Technical Analyst, SAMCO Securities, after a strong opening and attaining a fresh high of 22,297.50, Nifty traded in a narrow range and concluded almost flat at 22,212.70. The global market, especially the US DJIA and NASDAQ bolstered the Indian market sentiment when markets opened for trading. Mid-caps and large caps demonstrated robust performance with Realty, Private Banks, Metal, and FMCG pivotal in sustaining the rally.

Technically, Nifty continued its ascent, maintaining higher highs and higher lows in the daily timeframe, above the 20 and 50 Simple Moving Averages (SMA). The Relative Strength Index (RSI) stood strong at 62. Support levels are at 22,000 and 21,900, with resistance at 22,500. Bank Nifty concluded at 46,811.75 advancing by 0.92 % last week. The MACD indicators maintained a neutral to positive stance. The Index is trading above the 20-day SMA. A critical resistance level remains at 47,800 for next week, if broken, which may initiate a next upside rally. The volume profile analysis identified 46,000 as a strong support level for the upcoming trading sessions, he further added.

Weekly Market Outlook

Santosh Meena, Head of Research, Swastika Investmart Ltd said, "Looking ahead, as we approach the February month Futures and Options (F&O) expiry alongside the MSCI rebalancing scheduled for Thursday, we anticipate heightened volatility. Several macroeconomic indicators from both domestic and global fronts will play crucial roles. In the US, GDP numbers and initial jobless claims will impact bond yields. Moreover, our own Q3 GDP figures slated for release on February 29th and monthly auto sales data on March 1st will be closely watched. Besides institutional flows, factors such as the movement of the dollar index, US bond yields, and crude oil prices will also influence market dynamics."

"From a technical standpoint, Nifty has broken out of a 45-day consolidation period, indicating potential upside towards the 22500 level. Immediate support lies at the 20-day moving average (DMA) around 21900, while the 50-DMA at 21700 serves as a key support level. In the BankNifty, a critical supply zone is observed in the range of 47250-48000. A breach above 48000 could trigger significant short-covering. On the downside, strong support is seen in the 46400-46000 range," the analyst added,

"Analyzing derivatives, Nifty currently lacks major call writing until the 23000 mark, while put writers at the 22000 level exhibit confidence. In BankNifty, there's a tug-of-war between call and put writers at the 47,000 strike price. Notably, FIIs maintain a long exposure of 44% in index futures, while the put-call ratio stands at 1.02, indicating a potential for further short-covering moves," Santosh Meena further stated.

Stocks To Buy On Monday

Sumeet Bagadia, Executive Director of Choice Broking, has a positive outlook on the shares of BF Utilities and UNO Minda as of Monday, February 26. For both stocks, the analyst has recommended a buy prediction for tomorrow's trading session.

UNO Minda

Buy UNOMINDA in cash @ Rs 655.05, stop-loss @ Rs 636, target @ Rs 687

UNOMINDA is currently trading at Rs 655.05, showing signs of a bullish trend with a bullish candle and significant trading volume. This indicates growing market interest and potential further upward movement.

Moreover, UNOMINDA is trading above key Exponential Moving Averages (EMAs), including the 100-day and 200-day EMAs. This suggests a robust bullish momentum, signalling the potential for continued upward price action. The Relative Strength Index (RSI) is at 49, indicating an upward trajectory and confirming an increase in buying momentum.

For traders looking to capitalize on this potential, buying UNOMINDA at Rs 655.05 is advisable. To manage risk, setting a stop-loss (SL) at Rs 636 is recommended. This SL level acts as a safety net, protecting investments in case of an unexpected market reversal.

In conclusion, UNOMINDA presents an attractive buying opportunity, with a target price of Rs 687. However, it is essential for investors to exercise caution and implement risk management strategies, including setting a stop-loss, to safeguard their investments.

BF Utilities

Buy BFUTILITIE in cash @ Rs 915.15, stop-loss @ Rs 899, target @ Rs 977

BFUTILITIE is exhibiting strong bullish momentum, currently trading at an all-time high of 948.8 levels. The recent breakout above the crucial resistance at 855 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, BFUTILITIE 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 72 levels.

For traders, keeping an eye on the strong support near 899 levels is advisable, as a breach of this level could signal a shift in sentiment. Overall, BFUTILITIE 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 BFUTILITIE and the CMP of 915.15 with a stop loss of 899 for the target of 977.

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.