Technical Trade Call: 2 Stock Picks By Sumeet Bagadia On Wednesday, 10th Jan

On Tuesday, the Nifty and Sensex, the key Indian indices, finished flat on strong global cues. Nifty closed close to the 21,550 mark at 21,544.85 by adding 31.85 points, while the Sensex ended at 71,386.21, up 31 points. Realty was the top gainer, up 2.52%, followed by Auto and Pharma; Media, on the other hand, was the primary loser.

The PSU Banking sector and BankNifty both had a poor day's climax. The top 5 gainers on the Nifty pack were Adani Enterprises, Hero Motocorp, Adani Ports and Special Economic Zone, Sbi Life Insurance Company, Apollo Hospitals Enterprise, and Adani Enterprises; the top 5 losers were Asian Paints, Bajaj Finserv, Britannia Industries, Nestlé India, and HDFC Life Insurance Company. On the broader market front, the BSE Midcap index ended flat while the small-cap index added 161.12 points.

Market Outlook

Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy said, "It is a consolidation phase for the markets as Nifty has been trading in a narrow range of 21500 to 21800 for the past ten sessions. This consolidation has allowed Nifty to fill the unusually large gap between its 50-day mean level. 21500 should provide a strong support for Nifty which is substantiated by the option chain data. The broader upside trend for the market is still intact and Nifty may soon see the levels of 22000 once the level of 21800 is breached. However, intermittent volatility can not be ruled out as the results season kicks in."

Nifty Outlook

Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said, "Selling pressure is evident within the 21700-21750 zone, and 21500 stands out as a crucial support level for Nifty. Any significant directional movement for Nifty hinges on two possibilities: achieving a closing above 21750 to reclaim bullish momentum, or experiencing a close below 21500, which could prompt additional selling pressure and potentially pull the Nifty index toward the 21200 mark."

Bank Nifty Outlook

The Bank Nifty index witnessed continued dominance by bears as selling pressure intensified from higher levels. The index is currently facing a strong hurdle at the 48000 mark, where a significant buildup in open interest is observed on the call side. The immediate support for the index is positioned at the 47000-46900 levels. A breach below this support zone is likely to trigger aggressive selling pressure, potentially leading to further downside momentum, added Kunal Shah.

Stocks To Buy Today

Sumeet Bagadia, executive director of Choice Broking, suggested buying two stocks on Wednesday, January 10, 2024. The entry price, stop loss, and target price for Poonawalla Fincorp and Radico Khaitan are as follows.

RADICO

Buy RADICO in cash @ Rs 1681.05, stop-loss: Rs 1645, target: Rs 1760

RADICO is currently trading at Rs 1681.05. The stock has a potential for further upward movement, reaching Rs 1760 levels. On the downside, substantial support is evident near Rs 1645.

Furthermore, RADICO is trading above key Exponential Moving Averages (EMAs), including the 20-day, 50-day, and 200-day EMAs. This suggests a strong bullish momentum, indicating the potential for continued upward price action. The Relative Strength Index (RSI) stands at 60.84, signalling an upward trajectory and confirming an increase in buying momentum.

To manage risk effectively, it is advisable to set a stop-loss (SL) at Rs 1645 to protect the investment in case of an unexpected market reversal. A prudent strategy involves considering buying opportunities on market dips at levels of Rs 1670.

In summary, considering the technical analysis and prevailing market conditions, RADICO appears to present a promising buying opportunity for those targeting a Rs 1760 price objective, contingent upon the implementation of prudent risk management measures.

POONAWALLA

Buy POONAWALLA in cash @ Rs 477, stop-loss: Rs 468, target: Rs 491

POONAWALLA is currently trading at a price of Rs 477. On the daily chart, a price formed Higher High and Higher Low candle stick pattern with good volume has occurred. The pattern suggests a target price of Rs 491 in the short term.

Furthermore, POONAWALLA exhibits a promising technical outlook. It has successfully closed above its short-term, mid-term, and long-term moving averages, including the 50-day, 100-day, and 200-day Exponential Moving Averages (EMA). This underscores the stock's strength across various timeframes. The Relative Strength Index (RSI) currently stands at 69, signifying strong momentum with room for further price appreciation.

To effectively manage risk, it is advisable to implement a stop-loss (SL) at Rs 468 to protect your investment in case of an unexpected market reversal. In summary, considering the technical analysis and prevailing market conditions, POONAWALLA appears to present an attractive buying opportunity for those aiming for a Rs 491 price target, 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.