Technical Picks: Vinay Rajani of HDFC Securities suggests these two stocks to buy or sell in the near-term

Stock market today: The key domestic indices, Nifty 50 and Sensex, experienced fluctuations during Monday’s session due to global trade worries impacting investor confidence, while Reliance Industries, a major player in the index, saw its largest decline in five months.

The Nifty 50 was down 2.75 points at 22,121.95 by 15:11 IST, while the Sensex lost 109.01 points to 73,088.89.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed out that the primary reasons for the ongoing selling by FIIs in India have been the elevated valuations and appealing US bond yields. These significant macroeconomic factors are gradually changing. Large-cap valuations are now reasonable, and certain sectors, such as financials, appear attractive.

US 10-year bond yields have decreased to 4.21%. Therefore, there is a chance that FIIs may lessen their selling activities in the future. Positive developments on India’s growth front are also noteworthy. The growth figures are rising from 5.6% in Q2 to 6.2% in Q3 and are suggesting a growth rate exceeding 7% in Q4, indicating a cyclical recovery that is favorable for the stock market.

Market Views – Vinay Rajani, Senior Technical and Derivative Analyst, HDFC Securities

Nifty 50

Nifty 50 continued to remain in the down trend with a rise in selling momentum. Nifty 50 has broken down below the falling wedge on the daily and weekly chart. However, after falling for 5 consecutive months, the index has reached very near to the support level, derived from upward sloping trend line adjoining the monthly lows of June 2023 and March 2023 bottoms.

Nifty 50 has also reached the crucial support of 100 Week EMA, which acted as support during previous market corrections. 100 WEMA for Nifty 50 is currently placed at 22,041, while the upward sloping trend line comes somewhere in the band of 22,000-22,050.

14 days RSI for Nifty 50 has reached 22, which is the lowest reading since March 2020. Percentage of members above their 200 days SMA in NSE500, has reached to 10, which is considered to be an extreme lower end. These developments indicate the oversold condition for the markets in the short term. This could lead to mean reversion in the breadth and as a result markets could see a strong pullback.

Strategy: Markets are clearly in the down trend but considering the oversold condition on most of the benchmark indices, we cannot rule out the possibility of pullback from the current levels.

Immediate resistance band for Nifty 50 is seen at 22,300-22,500. The positional trend of Nifty 50 will remain bearish till it closes above 22800 on the upside. Short term support is seen near 22,000, below which it could slide down to the next support zone of 21,550-21,800. Mentioned support and resistance levels should be utilized for initiating and squaring off the trading positions.

Technical Picks: Stocks to buy or sell in the near-term

Vinay Rajani of HDFC Securities recommends these two stocks in the near term – Berger Paint, and Angel One March Futures.

Buy Berger Paint( ₹482) | Target ₹525 | Stop-loss ₹455

Stock saw a long buildup of 52% in the February series, which indicates bullish sentiment in the counter as per the derivative data. Stock has shown resilient movement in last two months and same is expected to continue. Daily MACD indicator has been holding above equilibrium.

Sell Angel One March Futures ( ₹1,892): | Target Rs. 1,750 | Stop-loss ₹2,000

Stock witnessed short buildup of 51% in the February series, which indicates bearish sentiment in the counter as per the derivative data. Stock is placed below its 20,50, 100 and 200 DMA, suggesting primary down trend. Stock breached major support of previous swing low placed near 2016.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.