Day Trading Guide: 2 Stock Picks By Sumeet Bagadia To Buy Today, 26th October

On Wednesday, the Indian market continued to decline for the fifth straight session against the background of ongoing global volatility. The Nifty dropped 159.60 points, or 0.83 percent, to reach 19,122.20, while the Sensex dropped 522.82 points, or 0.81 percent, at 64,049.06 at the closing. Top gainers on the Nifty included Coal India, Tata Steel, Hindalco Industries, Tata Consumer Products, and SBI, while top losers were Apollo Hospitals, Adani Enterprises, SBI Life, Cipla, and Eicher Motors.

Nifty Outlook Today

Mr. Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities said, "The Nifty index continued its slide for the second consecutive day and closed at 19,122, down 160 points. The Put-Call Ratio (PCR), a sentiment indicator dropped to 0.55 and is now close to the February 22, low of 0.54. It indicates heavy presence of call writers over put writers in the market currently.

Nifty Futures Open Interest (OI) indicated a build-up of fresh short positions. Nifty closed below the key level of 19,230 on the daily chart. Heavy call writing was observed in 19,200 & 19,300 strikes which led the down move in Nifty today. The next visible support for Nifty is placed at 18,700 levels. The option activity at 19,100 strike will provide cues about Nifty Intraday direction ahead of the monthly expiry Thursday (tomorrow)."

Rupak De, Senior Technical analyst at LKP Securities said, "The Nifty has faced selling pressure for a second consecutive day, leading to a close below the crucial support level at 19,200. Furthermore, the index has closed below its significant moving averages, signifying a bearish trend. The immediate support stands at 19000, with the highest open interest in put option contracts, while resistance is expected in the range of 19,250-19,300, as indicated by substantial call writing during today's trading session."

Bank Nifty Outlook Today

Mr. Ashwin Ramani said, "Bank Nifty continued to move in lower low formation for the third consecutive day and closed at 42,832, down 319 points. Long unwinding was observed at 43,100 & 43,200 strikes which led to a sharp down move in the index today. The max pain, which is the strike with most open active option contracts is placed around 42,400 levels."

Kunal Shah, Senior Technical & Derivative analyst at LKP Securities said, "The Bank Nifty bears maintained control, leading to a breach of the 43,000 support level. The overall market sentiment remains bearish, and a "sell on rise" strategy is advisable. Immediate resistance is seen at 43,500, and further selling pressure could potentially drive the index down to 42,000, a long-term support level."

Stocks To Buy Today

Sumeet Bagadia, Executive Director at Choice Broking has recommended two shares to trade on Thursday, 26th October 2023.

M&M

Buy M&M in cash @ Rs 1565, stop-loss @ Rs 1540, Target @ Rs 1615

Based on the technical analysis of M&M, the stock exhibits favorable indicators for a potential buy position.Currently, it has demonstrated strength by closing above its short, mid, and long-term Exponential Moving Averages (EMAs) of 50, 100, and 200. This suggests a positive trend in its price movements. Additionally, the Relative Strength Index (RSI) at 50 indicates a balanced momentum, implying room for potential upward movement. The Average Directional Index (ADX) stands at a moderately robust level of 20, further corroborating the stock's positive trajectory.

Given these indicators, it is advisable to consider a buy position with an entry point at 1565. To manage risk, a stop loss (SL) at 1540 is recommended, ensuring that potential losses are contained. The target price (TGT) is set at 1615, indicating a reasonable potential for upward movement.

United Breweries

Buy UBL in cash @ Rs 1629, stop-loss @ Rs 1545, target @ Rs 1780

The current trading price for UBL stands at 1629. On the daily chart, a rounding bottom pattern has taken shape, with a neutral candlestick forming at the pattern's base, indicating a potential shift towards a bullish trend. If the price manages to break above 1650, it may gain bullish momentum. For investors, it's a prudent strategy to consider buying opportunities around the 1600 level, particularly in the event of any price corrections.

Additionally, UBL is currently trading above key Exponential Moving Averages (EMAs), including the 20-day, 50-day, 100-day, and 200-day EMAs. This reinforces its bullish momentum and implies the possibility of further upward price movement.

The Relative Strength Index (RSI) is presently at 63.4 and trending upwards, indicating increasing buying momentum. Furthermore, the Stochastic Relative Strength Index (Stoch RSI) has recently shown a positive crossover from the oversold region. This confluence of technical indicators suggests that UBL may have the potential to reach a target price of Rs 1780 in the near term.

To prudently manage risk, it is advisable to implement a stop-loss (SL) at Rs 1545 to protect your investment in case of an unexpected market reversal. In summary, considering the technical analysis and current market conditions, UBL seems to offer an attractive buying opportunity for those aiming for a Rs 1780 price target, provided that sound risk management strategies are in place.

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.