Sumeet Bagadia of Choice Broking Recommends 2 Stocks To Buy On Monday, 7th Aug

On August 4, benchmark indices broke a 3-day losing trend and closed higher. The Nifty was up 135.30 points or 0.70 percent at 19,517 at Friday's end, and the Sensex was up 480.57 points or 0.74 percent at 65,721.25. BSE Sensex and Nifty50 both had weekly losses of 0.6 percent. The stock market, however, will pay close attention to this week's MPC meeting since the RBI is anticipated to keep its policy rates unchanged at 6.5%.

Market Outlook

"The market will react to the upcoming RBI Policy, Inflation data, forex reserve, ongoing Q1FY24 earning season, crude oil inventories, US inflation data, US Initial jobless claims, and UK GDP Data will come in the upcoming week. Major companies will be announcing quarterly results such as Indigo Paints, Emami, Torrent Pharma, Aarti Industries, Adani Ports, Coal India, Hindalco, NMDC, Oil India, Bata India, Bharat Forge, Tata Power, ZEEL, 3M, Bajaj Electrical, Hero Motocorp, LIC, Apollo Hospitals, Godrej Industries, IRFC, Info Edge, ONGC, Voltas and many more," said Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd.

"The Nifty corrected more than 680 points after making its all-time high at 19991 caused by sudden selling by Foreign Institutional Investors (FIIs). The negative sentiment can be attributed to the downgrade of the US rating and profit booking by investors who were concerned about high stock valuations. These concerns were also flagged by analysts. Additionally, mixed global economic data may have contributed to the cautious market sentiment. However, it is worth noting that India's overall unemployment rate fell in July. The total joblessness rate declined to 7.95% in July, which is a positive sign for the economy," said Arvinder Singh Nanda.

"From a technical analysis perspective, the market found support at an important level around 19300 and closed above 19500. The Relative Strength Index (RSI) had previously been in the overbought zone, but it has now come down to 67, indicating a potential easing of bullish momentum. The market is still supported by the 55-day Exponential Moving Average (EMA). Overall, the market remains uncertain, and investors should closely monitor the support and resistance levels, technical indicators, and global economic developments to make informed decisions," Arvinder Singh Nanda further stated.

Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd said, "The market will also have an eye on the RBI MPC meeting, which will be announced on August 10, 2023. The RBI may reportedly keep the benchmark repo rate unchanged in its upcoming bimonthly policy review. The RBI has kept the Repo rate unchanged at 6.5% Since February. We are heading towards the last batch of Q2 earnings of key companies such as ADANIPORTS, APOLLOHOSP, COALINDIA, GRASIM, HEROMOTOCO, HINDALCO, ITC, and ONGC, among others, which will lead to stock-specific movements."

"On the global front, the trend in global stock markets, the movement of the Dollar index, the rupee against the dollar, and crude oil prices will also dictate the trend. On the Marco front, market participants will be closely observing key events like Industrial Production and Manufacturing Production data, which will be released on August 11, 2023. China will announce the inflation rate for July on August 9, 2023. Additionally, Institutional activity will also have a significant impact on market trends," said Pravesh Gour.

Commenting on the Nifty prediction for the week, Pravesh Gour said, "Nifty is currently finding support at the 19300 level, and there was a recent correction from the 20000 mark. The 20-DMA (Daily Moving Average) located around 19600 is a crucial resistance level that Nifty needs to overcome. If Nifty manages to close above its 20-DMA, it may indicate a resumption of bullish momentum. However, there is a risk of nifty falling further to the 18888 level if it slips below the 19300 support. Traders should closely monitor the price action around these levels to assess the market's direction."

On the outlook of Bank Nifty, Pravesh Gour said, "On the other hand, Banknifty has shown some strength by regaining its 50-DMA. But there is another critical resistance at the 20-DMA, approximately at 45400. If Banknifty manages to break above this level, it could trigger short-covering and potentially lead to further gains. However, if it fails to break the 20-DMA, there's a possibility of the index falling towards the 43300 level."

Stocks To Buy On Monday

Sumeet Bagadia, Executive Director of Choice Broking has recommended 2 stocks to buy on Monday, 7th August.

Tech Mahindra

Buy TECHM in cash @ Rs 1175.20, stop-loss: Rs 1140, target: Rs 1230

TECHM, a leading technological business, has shown a bounce back from the support 1143 levels. The stock is currently trading at 1175.20 per share. The stock is trading above its 200-50 and 20-day moving averages, indicating a positive mood. A modest resistance is at 1186 levels if the stock sustains above the mentioned resistance then we can witness additional upward momentum. The Relative Strength Index (RSI) is currently at 55 and rising, indicating more purchasing activity. This makes TECHM an appealing investment.

Investors should be cautious and keep a watch on the stock if it falls below 1140, as this could negate the positive outlook. A short-term target of 1230 is achievable.

ABB India

In the daily chart, the stock has been consistently following a Higher High-Higher Low formation. As the stock has recovered from its previous support zone and remains over 4400, it may continue its primary trend. Price is also holding above the 20 and 40 EMAs. The RSI indicator, which is currently at 54, indicates bullishness in the stock.

One can initiate a long position at cmp 4438 for the target price of 4580. SL can be kept as 4580.

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.