Weekly Trading Guide: 3 Technical Stock Picks By Motilal Oswal

The Nifty ended the day with a gain for fourth week in a row of 138 points, or 0.74 percent, at 18,826, while the Sensex closed 467 points, or 0.74 percent, higher at 63,384.58 after intraday highs for the Sensex and Nifty on Friday were 63,520.36 and 18,864.70, respectively. The BSE benchmark climbed by 758.95 points, or 1.21%, on a weekly basis, while the Nifty jumped by 262.6 points, or 1.41%. The Nifty midcap 100 and Nifty smallcap 100 both ended in the green on the broader market. The majority of the sectors recorded positive outcomes, with the leading gainers, Banking and Financial, each up 1%. According to NSDL data, FPI inflow into Indian stocks in June totals Rs 16,406 crore. FPI investment totaled Rs. 43,838 crore in May, the highest figure since November 2022. FPI inflow in April was Rs 11,631 crore, compared to Rs 7,936 crore in March.

Benchmark Indices reached record highs after seeing a massive three-week winning streak. India's Wholesale Price Inflation (WPI) dropped to a 7-year low in May of -3.48% after contracting by -0.92% in April. Consumer price index (CPI) inflation in India dropped to a more than 2-year low of 4.25% in May from 4.42% the previous month and fell below the Reserve Bank of India's upper tolerance range of 6% for the third consecutive month.

On the global scale, a drop in crude oil prices caused the US CPI inflation rate to drop by 4% in May 2023, the lowest level since 2021. From 5.5% in April 2023, the core inflation rate plummeted to 5.3% in May, a level not seen in one to two years. As a result, according to analysts, the market will react this week to domestic and global cues, crude oil prices, developments in global markets, investment by FIIs and DIIs,and PM Modi's visit to the US next week.

Nifty Outlook

Commenting on the outlook of Nifty, Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd said "Nifty prices extended their gaining streak for a fourth consecutive week, increasing nearly 1.40% to end the week at 18826. The double-top formation is currently taking shape on the weekly chart. However, despite this formation, the ongoing strength in the market suggests that there is a possibility of invalidating the resistance zone, which is expected to be in the range of 18887-18900. On the decisive move above this resistance zone, it sets the stage for a fresh all-time high in the range of 19200-19300. We believe that any corrective decline in the index towards the 18680-18650 range could present an opportunity to establish new long positions. On the other hand, a decisive fall below the 18650 level will shift in momentum, potentially leading to a further decline toward the support levels at 18540 and 18470."

On the outlook of Bank Nifty he said "Bank nifty is likely to oscillate in a broad horizontal band of 43500 to 44500 with sideways to higher sentiments. Prices initially experienced a decline but managed to find support in the vicinity of the 10-week EMA, which has proven to be a crucial support level over an extended period. This reinforces the significance of the 10-week EMA as a key support for Bank Nifty. Any potential decline toward the 43700 level should be viewed as an opportunity to build a fresh long position with a target of 44500 which if broken decisively will lead to a fresh all-time high, estimated to be in the range of 45200-45500."

Stocks To Buy This Week

Here are the stock recommendations for the week shared by the Technical & Derivatives team, Broking & Distribution, Motilal Oswal Financial Services Ltd.

ITC

BUY ITC, current market price (CMP) Rs 453, stop-loss Rs 443, target price Rs 475

ITC is in overall uptrend on a monthly scale and trading at lifetime highs. It formed a strong bullish candle on the weekly scale and gave a falling supply trend line breakout on daily scale above 450 zones. The momentum indicators on the weekly scale are placed in bullish territory which will support the stock to move to higher levels. Thus recommending to buy the stock with keeping stop loss below 443 for an upside move towards 475 zones.

Hindustan Aeronautics

BUY HAL current market price (CMP) Rs 3844, stop-loss Rs 3760, target price Rs 4000

HAL is forming higher highs - higher lows on weekly scale from the past five weeks and gave Pole & Flag breakout on daily scale. It has formed a strong bullish candle on a weekly scale and gave the highest closing ever with noticeable volumes. RSI is holding well above 75 zones which suggests bullish momentum likely to continue in coming sessions. Thus recommending to buy the stock with keeping stop loss below 3760 for an target towards 4000 zones.

M&M Financial

BUY M&M Fin current market price (CMP) Rs 305, stop-loss Rs 293, target price Rs 325

M&M Fin has formed a strong bullish candle on weekly scale and all set to give consolidation breakout on daily scale after nine sessions. It is holding well above its 20DEMA and supports are gradually shifting higher. RSI is on the verge of breakout and good momentum is seen in midcap finance stocks. Thus recommending to buy the stock with keeping stop loss below 293 for an upside move towards 325 levels

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.