Trade Call: 2 Stock Picks By Sumeet Bagadia On 17th January, Wednesday

In light of corrections in the IT and pharmaceutical sectors bears disturbed the closing after profit booking seen in the first half of the session. The Nifty dropped 65.20 points or 0.30 per cent to close at 22,032.30, while the Sensex plummeted 199.17 points or 0.27 per cent to settle at 73,128.77. Top Nifty losers were Infosys, BPCL, Tata Steel, Titan Company, ITC, and Maruti Suzuki; top winners were HCL Technologies, Wipro, NTPC, and Divis Laboratories. Among sectors, metal and oil & gas indices were the top performers while IT, pharma and realty index were the worst performers. On the broader market front, BSE Midcap and small cap index ended with a loss of over 0.30% each.

After Hitting New High Probability of Pullback Brightens In Nifty

Om Mehra, Technical Analyst, SAMCO Securities said, "Nifty achieved a new high at 22,124.1, settling slightly lower at 22,035 with a marginal loss of 0.28%. This indicates a probable pullback after attaining a record high. The morning volatility subsided later in the day and INDIA VIX fell 1.6 % to close at 13.57 indicating a drop in market anxiety. Technically, Nifty's current position reveals a bearish candle, signalling potential exhaustion or consolidation. The index has surpassed the upper Bollinger band suggesting a likely reversion to the middle band soon. However, as the index is trading above significant moving averages, the hourly chart signals short-term weakness in Nifty. Major support remains at around 21,800 levels while resistance is placed at 22,222 levels."

"Nifty shrugged off its initial weakness and rose steadily to make a new all-time high of 22,124 before profit booking in the second half led the Index to close at 22,032, down 65 points. The Long-Short ratio, increased to 65.97% on 15th January compared to 63.35% on 12th January as the Foreign Portfolio Investors (FPIs) increased their long exposure and liquidated short positions in Index futures. Strong call writing (bears entry) was observed at 22,200 & 22,100 Strike in Nifty, which led to the Intraday fall in the Index. Strong call writing at a particular strike price, is usually considered as a sign of resistance getting stronger and stronger possibility of price moving lower. The bulls held on to the 22,000 Stike in Nifty, which is likely to act as an immediate support. The option activity at 22,000 Strike will provide cues about Nifty's Intraday direction on Wednesday. Nifty is likely to fall further down if put writers (bulls) exit from the 22,000 Strike," stated Mr. Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities.

Bank Nifty Outlook

Mr. Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities said "The movement in Bank Nifty mirrored trading patterns witnessed in Nifty with the price rising steadily in the first half before the index came under selling pressure in the second half, closing down 33 points at 48,125. Heavy call writing (bear entry) at 48,300, 48,200 & 48,100 Strike, led to an Intraday fall in Bank Nifty. Both the call & put writers battled heavily at the 48,000 Strike in Bank Nifty for the second consecutive day. The option activity at 48,000 level will provide cues about Bank Nifty's future direction."

Om Mehra added, "Bank Nifty concluded the session at 48,125.10 registering a marginal 0.07% decline. Bank Nifty exhibited uncertainty and sluggishness in anticipation of HDFCBANK releasing its Q3 numbers post market closing. The Relative Strength Index (RSI) remained neutral settling at the 60 level. The immediate support for Bank Nifty remains around 47,500 aligning with the 20-day Moving Average (DMA), while resistance is at 48,637. A breach of crucial support, especially the rising trend line and slipping below the 20 DMA, could intensify selling pressure."

Stocks To Buy Today

On Wednesday, January 17, 2024, Choice Broking's executive director Sumeet Bagadia suggests buying two stocks. For Nitin Spinners and Jindal Steel And Power, the entry price, stop loss, and target price are discussed below.

Jindal Steel And Power

Buy JINDALSTEL in cash @ Rs 749.75, stop-loss @ Rs 726, target @ Rs 795

JINDALSTEL is currently trading at 749.75. The stock has consistently found support around the 726 level, establishing it as a reliable support zone. The anticipated trading range for the stock is expected to be between 726 and 760, with the possibility of sideways movement within this range. A decisive close above the 760 level could propel the stock towards the 795 level in the coming days.

The Relative Strength Index (RSI) for JINDALSTEL is at 61.74, indicating potential upside. Additionally, the Stochastic RSI shows a positive crossover, further confirming the bullish sentiment. Notably, the stock is trading above all significant moving averages, highlighting its overall strength.

Considering these technical indicators and the current market conditions, it appears to be an opportune moment to consider buying JINDALSTEL at the current market price of 749.75. A reasonable target for this trade could be set at 795, with a recommended stop-loss at 726 to manage potential risks.

Nitin Spinners

Buy NITINSPIN in Cash @ Rs 330.15, stop-loss: Rs 317, target: Rs 370

Acquire NITINSPIN in cash at 330.15, with a stop loss at 317 and a target of 370. NITINSPIN is currently trading at 330.15, showcasing a robust technical position well above the critical 20-day, 50-day, and 200-day Exponential Moving Averages (EMA). The recent positive momentum suggests the potential for an upward trend.

The stock encounters a modest resistance zone at 350 levels, representing a crucial juncture. A successful breach could propel MRPL towards the target of 370 levels and beyond. Investors should closely observe the stock's performance around this resistance, as it may influence the sustainability of the positive momentum in the short term.

Strategically, maintaining long positions with a trailing stop loss at 317 is advised to protect gains while allowing for potential upward movement. The option to buy on dips provides an opportunity to enter or add to positions at potentially lower levels.

Considering this analysis, one might contemplate acquiring MRPL at the current market price (CMP) of 330.15, setting a stop loss at 317, and targeting 370.

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.