Day Trading Guide: 2 Stocks To Trade Today On 20th October As Recommended By Sumeet Bagadia of Choice Broking

On October 19, amid simmering Middle-East geopolitical concerns, Indian benchmark indices closed down in the turbulent session for the second straight session. The Nifty dropped 46.40 points or 0.24 per cent at 19,624.70 at closure, and the Sensex plummeted 247.78 points or 0.38 per cent to close at 65,629.24. Major Nifty losers included Wipro, Tech Mahindra, UPL, Sun Pharma, and NTPC, while winners included Bajaj Auto, LTIMindtree, Nestle India, Hero MotoCorp, and UltraTech Cement. On the sectoral front, Nifty Auto was the top gainer and Nifty Metal was the worst.

Market Outlook

Aditya Gaggar Director of Progressive Shares said, "The market witnessed a complete reversal in today's trade. Post a tepid opening, the Index gradually began to recover its losses and at one point in time it was in green. However, Index found resistance around its 21DMA i.e. 19,670, and reversed to end the weekly expiry day lower at 19,624.70 with a loss of 46.40 points. Among the sectors, Auto was the top performer while Metal and Energy corrected by over 0.50%. Quick recovery from the lower levels helped the Mid and Smallcaps to outperform Frontline peers. Benchmark Index is broadly oscillating in the range of 19,490-19,850 and at present it is near the lower end of the range; for a trend reversal and its confirmation, Index has to give a convincing close above 19,850."

Nifty Outlook Today

Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities said, "Nifty opened with a gap down but found support from the bulls quickly as the price rose sharply to close at 19,625, down 46 points. The Foreign Portfolio Investors (FPIs) Long-Short Ratio has risen from to 29.23% on October 18 from 27.21% on October 13 as the FPI's marginally covered their short positions in Index futures. The level of 19,500 acted as a strong support for Nifty on Intraday basis. Put writers were seen strengthening their position at 19,500 Strike today. A breakout and close above 19,700 supported by short covering can set the stage for a resurgence of bullish momentum in the Nifty Index."

Rupak De, Senior Technical analyst at LKP Securities said, "Nifty slipped below the consolidation range low of 19,650 and closed below it for the day. However, the 55EMA acted as a support on a closing basis. In the short term, the index might remain volatile, and a move above 19,650 could take the index towards 19,850. However, a failure to move above 19,650 might result in selling pressure once again."

Bank Nifty Prediction Today

Ashwin Ramani said, "Bank Nifty rose sharply throughout the day before profit booking in the last hour led to Index closing at 43,755, down 134 points. Bank Nifty took support from the 43,600 level today. The Index is at the make-or-break level as breakdown below 43,600 can lead to Bank Nifty moving down by another 300 points until 43,300, while a close above 44,000 can ignite buying interest again."

Kunal Shah, Senior Technical & Derivative analyst at LKP Securities said, "The Bank Nifty index continued to experience a period of sideways consolidation, characterized by an ongoing battle between the bulls and the bears.The index currently faces immediate resistance at the 44000 level, while support is situated at 43500.

A decisive breakout in either direction from this range is expected to lead to significant trending moves.The prevailing sentiment for the Bank Nifty remains tilted toward a "sell on rise" approach, implying that traders are more inclined to sell the index during price rallies. Strong resistance is observed at 44500, and a closing price above this level would indicate a resumption of the uptrend."

Stocks To Buy Today

Sumeet Bagadia, Executive Director at Choice Broking has recommended 2 stocks to trade on 20th October, Friday.

Colgate-Palmolive (India)

Buy COLPAL in cash @ Rs 2088, stop-loss: Rs 2045, target @ Rs 2163

It appears that COLPAL is exhibiting several bullish technical indicators, suggesting a potential breakout at the 2100 level. Notably, the stock has successfully surpassed key moving averages, including the 20, 50, 100, and 200-day Exponential Moving Averages (EMA), indicating a positive shift in its trend. Additionally, the Relative Strength Index (RSI) stands at 63 and is showing an upward trajectory, reflecting increasing momentum in the stock's price movement.

Furthermore, the Average Directional Index (ADX) is notably robust at 25, underscoring a strong prevailing trend. This suggests a sustained directional movement in COLPAL's price, indicating a potential for further upward movement. The expansion of the Bollinger Bands further corroborates this outlook, signaling increased volatility and potential for a significant price shift.

With these indicators in mind, entering a position at 2100 could be a strategic move. Setting a stop-loss at 2045 and targeting 2163 demonstrates a prudent risk management strategy. This allows for a favorable risk-reward profile, aligning with the current technical signals and providing a structured approach to capitalize on potential upside movements in COLPAL's price.

UltraTech Cement

Buy ULTRACEMCO in cash @ Rs 8518.5, stop-loss: Rs 8193, target: Rs 9200

ULTRACEMCO is currently trading at Rs 8518.5. On the daily chart, the price has formed a bullish engulfing pattern from the bottom with significant volume, indicating strong bullish momentum to the upside. The short-term target for UltraTech Cement is set at Rs 8800 and Rs 9200. UltraTech Cement shares have extended their gains by 2.0% after the release of 2Q results. The overall cement sector appears to be bullish, which further supports the positive outlook for this stock.

Furthermore, ULTRACEMCO is currently trading above critical Exponential Moving Averages (EMAs), including the 20-day, 50-day, 100-day, and 200-day EMAs. This positioning reinforces its bullish momentum and suggests the possibility of further upward price movement.

The Relative Strength Index (RSI) is currently at 60.16 and trending upwards, signifying increasing buying momentum. Additionally, the Stochastic Relative Strength Index (Stoch RSI) has recently shown a positive crossover from the oversold region. This combination of technical indicators suggests that ULTRACEMCO may have the potential to reach a target price of Rs 9200 in the near term.

To effectively manage risk, it is advisable to implement a stop-loss (SL) at Rs 8193 to safeguard your investment in case of an unexpected market reversal. In summary, considering the technical analysis and current market conditions, ULTRACEMCO appears to offer an appealing buying opportunity for those targeting a Rs 9200 price objective, provided that prudent risk management measures 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.