Sumeet Bagadia of Choice Broking Recommends 2 Stocks To Buy On Monday, 30th Oct

Friday saw benchmark indices halt a six-day losing trend and rise amid fluctuations in US markets and geopolitical issues. The Nifty gained 190.00 points, or 1.01 per cent to close at 19,047.30, while the Sensex added 634.65 points, or 1.01 per cent, at 63,782.80 at the closing. With the PSU Bank index rising by more than 4%, all sectoral indices finished the day on a green note. The BSE Midcap and Smallcap indices saw gains of 1.70% and 1.89%, respectively, on the broader market front.

Weekly Market Outlook

Vinod Nair, Head of Research at Geojit Financial Services said, "Ongoing unrest in West Asia and concerns over the potential impacts of higher interest rates on future economic growth have resulted in a decline in investor confidence. FIIs selling is affecting the domestic market invariably to heavy buying by DIIs. Domestic indices have displayed some recovery in the last trading day of the week, due to favourable US Q3 GDP growth and moderating US inflation leading to moderation in bond yield. Decent Q2 results in India, which were in line with optimistic estimates, may also support the market's rebound. However, the volatility of the global market is expected to delay the recovery trend of the domestic market, since the global market is focused on the risk of further slowdown of the global economy due to elevated interest rate and geo-political tension. "

"Amidst the ongoing market consolidation, sectors such as FMCG, consumption, fertilizers, and core segments like infrastructure, housing, are expected to present potential growth opportunities. Contributing factors include the mitigation of risks associated with raw material costs and a stable long-term demand outlook from external sectors, which may specifically support sectors like Chemical and Pharma in the medium-term. In the short-term, market sentiment remains cautious, with investors closely monitoring developments in West Asia, upcoming corporate earnings, and key economic data, including domestic PMI figures; to be announced next week," he further added.

Nifty Outlook

According to Mr. Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities, "The Nifty index bucked its ongoing trend of forming consecutive lower lows by closing higher at 19,047, up 190 points. The Future Open Interest (OI) indicated covering of existing short positions in Index futures, which led to a strong up move today. The Put-Call Ratio (PCR) improved from 0.63 a day earlier to 1.27 today, as put writers were dominant right from the word go on the first day of new expiry series. The maximum call open interest strike of 19,000 saw call writers exiting and put writers strengthening their positions, which is a bullish sign. Nifty broke past the previous day high of 19,042 but failed to successfully sustain above this level. Hence, the 19,050 level will be a key level for the Index as a move above this level can lead to filling of gap until 19,100 level. The level of 19,000 is expected to act as an immediate support for Nifty."

Bank Nifty Outlook

"Short covering was visible in Bank Nifty with the Index closing at 42,782, up 502 points. Call writers exited positions at the key strike price of 42,500, leading to a sharp rally on the upside. The bounce is likely to continue until 43,000 level. The option activity at 42,800 level will provide cues about Bank Nifty Intraday direction on Monday," said Ashwin Ramani.

Stocks To Buy On Monday

On Monday, October 30, 2023, Sumeet Bagadia, Executive Director at Choice Broking, recommended to buy or sell the below listed technical stocks.

Canara Bank

Buy CANBK in cash @ Rs 380.80, stop-loss @ Rs 365, TARGET: Rs 412

CANBK is presently trading at Rs 380.80. On the daily chart, the price has broken out of a rounding pattern with a retest and a strong reversal from support levels, accompanied by significant volume. This suggests that further bullish movement is likely. If the price closes above the Rs 385 level, it is expected to have an upside target of Rs 412 in the coming days.

Furthermore, CANBK 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 58.96 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 CANBK may have the potential to reach a target price of Rs 412 in the near term.

To effectively manage risk, it is advisable to implement a stop-loss (SL) at Rs 365 to safeguard your investment in case of an unexpected market reversal. In summary, considering the technical analysis and current market conditions, CANBK appears to offer an appealing buying opportunity for those targeting a Rs 412 price objective, provided that prudent risk management measures are in place.

Alkem Laboratories

Buy ALKEM in cash @ Rs 3675.15, stop-loss: Rs 3560, target: Rs 3860

ALKEM is currently trading at 3675.15 levels. The stock has bounced from the strong support of 3560 levels. The stock is trading above its 20, 50 and 200 Day Exponential moving average (EMA).

Momentum indicator RSI is also moving higher currently trading at 57 levels indicating strength. We can also witness a strong breakout of a falling trend line of daily charts which will help the stock to move higher. A smaller resistance is witnessed near 3770 levels, once stock surpasses the mentioned resistance it can move higher towards the target of 3860 and higher.

Based on the above technical analysis we recommend buying ALKEM at a CMP of 3675.15 with an SL of 3560 for the target of 3860.

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.