Sumeet Bagadia of Choice Broking Recommends 2 Stocks To Buy Or Sell On Monday, 26th June

In light of weak global cues, the Indian stock market saw losses for the second day on Friday. The Nifty index started the session in red and remained in negative territory throughout the session to close, losing 106 points at 18666. While Sensex closed at 62,979.37 level with a downside gap of 259.52 points. Metals, Consumer Durables, Auto, and Oil & Gas were down between 1% and 2%, while Pharma was the only sector to end on a green note. According to NSDL statistics, FPI inflow into Indian stocks so far in June totals Rs 30,664 crore. According to information from the National Stock Exchange, foreign portfolio investors sold shares worth Rs 344.81 crore during the last trading session. Three days of buying street by domestic institutional investors ended up breaking down resulting in net sellers on Friday. According to NSE records, they sold stocks worth Rs 684.01 crore. The US GDP figures, FPI activity, US Fed Chair's speech are the major events that could influence the Indian stock market this week.

Market Outlook

Commenting on the market outlook this week, Sumeet Bagadia - Executive Director of Choice Broking said Indian equity markets faced a second consecutive day of losses on Friday, influenced by weak global cues and discouraging economic data. The overall market sentiment remained pessimistic, with only the pharmaceutical sector showing resilience amidst the downturn. Sectors such as metals, media, and PSU banks experienced significant declines, contributing to the negative territory of most sectoral indices.

The market breadth tilted unfavourably, as the advance-decline ratio stood at 1:2. The NSE volatility index, India VIX, declined by 2.70%, reaching a level of 11.24. The broader markets, represented by the Nifty mid and small-cap indices, also witnessed declines of 1.24% and 1.17% respectively. Both the Sensex and Nifty closed with losses, declining by 0.41% and 0.56% respectively on Friday.

Looking ahead, the Nifty futures for the June series opened at 18,789, with a negative gap of 41.05 points from the previous close. Throughout the day, the Nifty futures experienced fluctuations, reaching an intraday high of 18,808.25 and a low of 18,690. Ultimately, the futures closed lower by 129.55 points or 0.69% at 18,700.50 levels.

Internationally, the US stock markets also closed lower on Friday, primarily due to selling pressure in the technology sector. Market sentiment was affected by Federal Reserve Chairman Powell's hawkish rate outlook during his testimony to Congress. Concerns regarding interest rate hikes and potential recession resurfaced as central banks worldwide accelerated their rate hike plans. The probability of the Fed raising interest rates by another 25 basis points in its July meeting now exceeds 70% in the futures market.

Similarly, European stock market indexes closed lower, with the German DAX experiencing significant declines. The DAX was particularly affected by Siemens Energy's stock dropping by 37% after the company withdrew its profit outlook, citing issues in its wind turbine unit. In contrast, economic data from the UK indicated positive consumer confidence and an uptick in retail sales for May.

Analyzing Nifty's daily data, it becomes evident that the index attempted but failed three times to surpass its all-time high. Consequently, selling pressures emerged, leading to a close around the 20-day exponential moving average (EMA) of 18,667. Throughout the current bull run, the Nifty has consistently held above the 20-day EMA. The daily relative strength indicator (RSI) dropped below 60 and is currently trading at 55. On the hourly timescale, a double top price pattern has emerged, with a neckline near 18,650. A potential pullback towards the strong support level at 18,400 is likely if the Nifty falls below this level.

On the upside, the Nifty faces a primary resistance barrier of around 18,900. It is worth noting that the highest call option (CE) writers are positioned at 18,800, while the highest put option (PE) authors are at 18,500.

Looking ahead to the coming week, market participants will closely monitor global cues, especially regarding interest rate developments and economic indicators. Additionally, any significant news or events relating to sectors such as technology, pharmaceuticals, metals, media, and PSU banks will impact market sentiment. Traders and investors will also keep an eye on the Nifty's performance relative to key levels, such as the 20-day EMA and the support and resistance levels mentioned earlier, to assess potential market movements.

Stocks To Buy Or Sell On Monday

Sumeet Bagadia - Executive Director of Choice Broking has recommended 2 stocks to buy on Monday, 26th June

M&M Financial

The stock is currently trading at 305 levels. The stock was facing resistance near 299 levels which was the upper range of the consolidation.

The stock has strongly moved on the higher side after the initial breakout and now again tested the breakout level of 301. Now any dip in the stock around 300 levels will be a buying opportunity. The stock is trading above all important moving averages indicating strength. The investors holding from lower levels should keep trailing stop loss.

According to the aforementioned technical analysis, we advise buying M_MFIN at a CMP of 305 levels and should add the stock on dips till 300 levels for the target of 317. If the stock closes below 298, our analysis will be invalid.

IndusInd Bank

The INDUSINDBK has bounced from the strong support of 1260. The stock is currently trading at 1308.70, which is also above all the important moving averages. The stock has demonstrated strength as evidenced by the ongoing volumes and upward movement of the stock. The stock has developed a Bullish Engulfing pattern on the daily chart, indicating its strength. The RSI indicator is also comfortably trading at 58 levels, which will support the upward movement of the stock. The stock has a smaller resistance level around 1335, which is also the recent top. Once stock surpasses the above-mentioned level the stock can move towards 1375 levels and above.

We recommend buying INDUSINDBK at a CMP of 1126 which can be accumulated near 1110 levels with a medium-term target price of 1175. Our analysis will be deemed invalid if the price closes below 1090.

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.