Trade Call: 2 Buy/Sell/Hold Picks By Sumeet Bagadia On Thursday, 21st Dec

The Nifty plummeted 302.90 points, or 1.41 per cent to close at 21,150.20 on December 20, while the Sensex dropped 930.88 points, or 1.30 per cent to settle at 70,506.31. Adani Ports, Adani Enterprises, UPL, Tata Steel, and Coal India were among the top Nifty losers, whilst ONGC, Tata Consumer Products, Britannia Industries, and Cipla were the top gainers. PSU Bank, the media, and the metal sector suffered the most losses as all sectoral indices ended in the red. The BSE Midcap and Smallcap indices both saw declines of more than 3 percent on the broader market front.

Nifty Outlook Today

Rupak De, Senior Technical Analyst at LKP Securities said, "The Nifty experienced a sharp correction as bearish sentiment persisted. It failed to sustain above 21500, resulting in increased call writing at the 21500 strike, subsequently leading to a significant downturn. At its lowest point, the Nifty dropped just below 21100 before recovering to close above that level. Looking ahead, there might be a consolidation phase for the Nifty in the near term. Resistance is expected around 21500, while support is anticipated at 21100."

Bank Nifty Outlook Today

Kunal Shah, Senior Technical & Derivative analyst at LKP Securities said, "The Bank Nifty index experienced intense selling pressure, resulting in the formation of a bearish engulfing candle on the daily chart. The immediate resistance for the index is situated at the 47600-47700 zone, and a breakthrough above this level could pave the way for further upside, targeting 48000. However, the overall sentiment remains bearish, suggesting a cautious approach with a preference for selling on any upward movements."

Market Outlook Today

Mr. Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities said, "Nifty opened with a gap up but lost steam quickly and continued to fall throughout the day to close at 21,150, down 303 points.

The Futures Open Interest (OI) indicated buildup of short positions in Nifty futures. The India VIX, known as the fear indicator, rose 4.2% to 14.45, gave major discomfort to the bulls. Nifty has given a lower close on the daily chart and has engulfed previous three days candle. Put writers exited from the 21,500, 21,400 & 21,300 Strike, leading to a strong down move in the Index."

"The call writers managed to keep the put writers away from conquering the 21,500 Strike in Nifty. A break below 21,070 level can lead to filing of gap until 20,950 level. Bank Nifty fell sharply throughout the day to close at 47,445, down 426 points. Strong call writing was observed at 47,700, 47,800 & 47,900 Strike, leading to a sharp down move in Bank Nifty. The fall can extend further until 47,200 levels where the next visible support is placed. A break below 47,200 can intensify the fall further until 47,000 levels," the analyst further added.

Mr. Om Mehra, Technical Analyst, SAMCO Securities said, "In the December series, Nifty witnessed a worst sell-off. This had its severe impact on the mid-cap and small-cap bull Run. The benchmark Nifty faltered as bulls failed to hold 21,500 levels. The intensity of the sell-off was such that not a single sector could manage to close in the green while Nifty PSU Bank and Metal Nifty PSE plummeted nearly 4% each.

Technically, Nifty showcased a bearish engulfing candle on the daily chart. Intraday, the index experienced a substantial drop of over 500 points from the day's high of 21,593. The hourly chart indicates that 21,000 levels have minor support, while the crucial support lies at the 20-day moving average, ranging around 20,800."

"The fear gauge, India VIX, is actively climbing above the 14 level, enhancing the concerns. Bank Nifty concluded the session at 47,445.30 experiencing a 0.89% decline. A notable correction in the RSI dropping from yesterday's close of 75 to 67 today, signals a potential shift in trend. Amidst heightened volatility, Fibonacci retracement points to a support level at 46,350 while resistance at 48,000 levels," the analyst further added.

Stocks To Buy Today

On Thursday, December 21, Choice Broking's executive director, Sumeet Bagadia, suggested purchasing two stocks. These are the entry price, stop loss, and target price for V-Mart Retail and Ajanta Pharma.

V-Mart Retail

Buy VMART in cash @ Rs 1945.95, stop-loss: Rs 1870, target: Rs 2070

VMART is currently trading at 1945.95 levels, displaying a robust uptrend with a significant green candle on the daily chart. The stock is trading above crucial short-term (20-Day EMA) and medium-term (50-Day EMA) levels, affirming its positive momentum.

The breakout above the prior resistance at 1870 levels today suggests a potential move towards the target of 2070 levels. The momentum indicator RSI at 69 levels further supports the stock's strength. This favourable technical setup indicates a bullish sentiment, and investors may consider this breakout as an opportunity, implementing prudent risk management strategies in their trading decisions.

Based on the above analysis we recommend buying VMART at CMP of 1945.95 for the short to medium term with a stop loss of 1870 for the target of 2070.

Ajanta Pharma

Buy AJANTPHARM in cash @ Rs 1899.65, stop-loss: Rs 1860, target: Rs 1975

AJANTPHARM is presently trading at 1899.65 levels, engaged in a consolidation phase within the range of 1860-1920. This range coincides with a robust support zone, encapsulating both the 50-day and 20-day Exponential Moving Averages (EMA).

A potential breakout above the upper boundary of this range could propel the stock towards the target of 1975 and beyond. The consolidation indicates a balance between buying and selling pressures. The Momentum indicator, RSI, currently at 49 levels, suggests a neutral stance. Traders and investors should closely monitor the breakout for potential trade opportunities, considering the support range for possible entries and exits.

Based on the above analysis we recommend buying AJANTPHARM at the CMP of 1899.65 for the short to medium term with a stop loss of 1860 for the target of 1975.

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.