Sumeet Bagadia of Choice Broking Recommends 2 Stocks To Buy On Monday, 14th Aug

On August 11, the Indian stock market lost ground for the second straight day ahead of the announcement on Monday of the country's inflation figures. The Nifty was down 114.80 points or 0.59 percent at 19,428.30 on Friday's close, and the Sensex was down 365.53 points or 0.56 percent at 65,322.65 level. IndusInd Bank, NTPC, SBI Life Insurance, Divis Labs, and UPL were the top Nifty losers, while HCL Technologies, Titan Company, Power Grid Corporation, UltraTech Cement, and Reliance Industries were the top gainers.

Commenting on the market outlook for next week, Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said, "The result season is now coming to an end. Overall the earnings have been in the expected line. In the absence of any major trigger and uncertain global cues, we expect the market to consolidate in the range. Investors on Monday would react to India's IIP data which will be released late today (Friday). The market would trade cautiously ahead of India's inflation data (to be released on Monday) which is expected to rise in July on account of high vegetable prices. On account of the Independence Day holiday on Tuesday, the market might remain lackluster."

Nifty Prediction

Commenting on the outlook of Nifty, Jatin Gedia - Technical Research Analyst at Sharekhan by BNP Paribas said, "The Nifty opened on a flat note and has drifted lower throughout the day to close around the lows for the day down ~100 points. On the daily charts, we can observe that the Nifty has witnessed follow-through selling pressure and broken down from the inside bar pattern formed in the previous trading session on the downside. The Nifty is likely to witness continuation of the selling pressure and with both the daily and hourly momentum indicators having a negative crossover it is likely to be trending moves on the downside. On the downside we expect the Nifty to target levels of 19100. The crucial support zone on the downside is placed at 19350 - 19290 and on the upside, resistance is placed at 19530 - 19500."

Bank Nifty Prediction

Commenting on the outlook of Bank Nifty, Jatin Gedia said, "Bank Nifty has decisively broken the 44500 - 45000 range on the downside indicating weakness. The momentum indicator has a negative crossover which is a sell signal. Thus both price and momentum indicators are suggesting a further downside over the next few trading sessions. On the downside 44000 is the short-term target."

Market Outlook

According to Santosh Meena, Head of Research, Swastika Investmart Ltd, "The Indian markets have seen a third consecutive week of decline, attributed to profit booking by major private banks and selling by Foreign Institutional Investors (FIIs). Interestingly, the midcap and smallcap markets have remained bullish during this period. As we approach a shortened trading week due to the market closure on August 15th, several key factors will influence market dynamics. Macroeconomic indicators, rupee fluctuations, and FII activities will be pivotal in shaping market trends in the coming days."

"Domestically, the upcoming release of Industrial Production (IIP) and Inflation figures holds significance, especially in light of the notable increase in vegetable prices that have raised concerns about inflation. Globally, attention will be directed toward Japan's inflation data, China's IIP numbers, and US retail sales statistics. A critical aspect to monitor is the exchange rate between the rupee and the dollar. Recent indications of rupee weakness, with the potential to breach the 83 level against the dollar, necessitate close observation. Given the recent consistent selling by FIIs, their future actions will be closely tracked, as they hold the potential to dictate the overall trajectory of headline indices," said Santosh Meena.

"From a technical standpoint, the Nifty index is exhibiting signs of weakness, characterized by a lower top formation. The challenge lies in surpassing the 20-day moving average (20-DMA), positioned around the 19650 mark. On the downside, immediate support rests at 19300. A breach below this level could expose Nifty to further declines, possibly targeting the 19191 and 18888 levels. The re-establishment of bullish momentum hinges on a rebound above the 20-DMA," stated Santosh Meena.

"Conversely, Bank Nifty is displaying underperformance and has experienced a breakdown below the crucial support level of 44444. This breach opens the door to a potential support zone ranging from 43500 to 43300. A bullish resurgence would necessitate a successful breach of the 50-day moving average (50-DMA) at 44700. Furthermore, insights from the derivative market indicate a decline in FIIs' long exposure in index futures to 40%, signifying a short-term bearish bias. Additionally, the put-call ratio stands at 0.91, approaching oversold territory," said Santosh Meena.

Stocks To Buy On Monday

Sumeet Bagadia, Executive Director of Choice Broking has recommended 2 stocks to buy on Monday, 14th August.

Reliance Industries

Buy RELIANCE in cash @ Rs 2547.15, SL @ Rs 2480, TGT @ Rs 2630

RELIANCE is currently trading at 2547.15 levels. The stock has a strong support at 2485 levels which is just below its 20 day EMA levels. We can also witness small resistance near 2558 levels. Once stock maintains a higher level than 2558, it may advance upward and approach the 2630 levels which are also close to all-time high levels. Also the stock is trading above all the important moving averages. The RSI indicator is comfortably trading at 59 levels which indicate that the stock has potential to move upwards.
Based on the above technical analysis we recommend buying RELIANCE at CMP of 2547.15 for a medium term outlook with a stop loss of 2480 for targets of 2630.

Bharat Electronics

BEL has bounced back from its previous support zone. The stock is also sustaining above 23.6% of Fibonacci retrenchment indicates strength in price action. Stock is trading above 20 EMA as well. RSI indicator is comfortably trading near 62 levels suggesting that the present rebound can continue and that the stock may inch on the higher side.

Hence, based on the above technical structure one can initiate a long position at CMP 132.05 for the target price of 139. SL can be kept as 128.

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.