Trade Call: 2 Stock Picks By Sumeet Bagadia On 18th January, Thursday

The stock market was in a negative mood on Wednesday due to disappointing Chinese growth statistics and rising US bond yields. At closing, the Sensex had down 1,628.01 points, or 2.23 per cent, at 71,500.76, while the Nifty had dropped 460.30 points, or 2.09 per cent, at 21,572. HDFC Bank, Tata Steel, Kotak Mahindra Bank, Axis Bank, and Hindalco Industries were the primary losers on the Nifty, whilst Apollo Hospitals Enterprise, HCL Technologies, Tech Mahindra, Sbi Life Insurance Company, and LTIMindtree were the winners. On the sectoral front, except IT all sectors ended in red with the most selling pressure seen in the banking sector.

Market Outlook Today

Bears struck back with full force and dominated today's trade. Without any significant pullback, the Index kept compounding its losses to end the session at 21,571.95 with a loss of 460.35 points. Only the IT sector managed to end the day in green; and on the flip, BankNifty was the major laggard followed by Metal. A correction was seen in the Broader markets as well but Mid and Smallcaps managed to outperform the Frontline Index. By confirming the negative divergence, the Index has made a bearish candle on the daily chart with a probability of forming an advanced harmonic Bullish Cypher pattern at 21,220. The major laggard of the day i.e. BankNifty has given a breakdown from a Head & Shoulder formation and as per the pattern, the downside target comes at 45,500. Considering today's steep fall, a relief rally can be expected in the markets but sustainability at higher levels will be a key factor to watch out for, said Mr. Aditya Gaggar Director of Progressive Shares.

Nifty Outlook Today

Nifty witnessed a significant decline driven by profit-taking following its record high of 22,124 in the previous trading session. Wednesday's profit booking led the index to the 21-day Exponential Moving Average, a crucial short-term moving average. Sentiment could potentially deteriorate further if Nifty drops below 21,550, where the 21EMA is situated. On the downside, a breach of 21,550 may result in the index descending towards 21,350. Conversely, on the upside, resistance is observed at 21,650, said Rupak De, Senior Technical Analyst, LKP Securities.

Bank Nifty Outlook

Bank Nifty experienced a sharp decline on the back of sell off in the heavyweight HDFCBANK. The index sharply fell below the 38.20% Fibonacci Retracement level of the previous leg of rally (from 43,230 to 48,347). Additionally, the index retreated within the area of the previous swing high after a consolidation breakdown on the daily chart. The sentiment may remain weak, with immediate support at 45,900-45,930. A drop below 45,900 could potentially initiate a further correction towards 45,500. On the upside, resistance is identified at 46,350, stated Rupak De.

Stocks To Buy Today

Sumeet Bagadia, executive director of Choice Broking, recommends purchasing two stocks on Thursday, January 18, 2024. The entry price, stop loss, and target price for Ircon International and Apollo Hospitals Enterprise are addressed here.

Ircon International

Buy IRCON in cash @ Rs 208.35, Stop-loss @ Rs 202, target @ Rs 226

The current market analysis paints a promising picture for IRCON, currently trading at 208.35, positioned robustly above critical Exponential Moving Averages (EMA) such as the 20-day, 50-day, and 200-day indicators. The recent positive momentum in the stock suggests the potential for an upward trend. An important factor to consider is the modest resistance zone at 215 levels, representing a crucial juncture. A successful breach of this level could propel IRCON towards the target of 226 levels and beyond, making it imperative for investors to closely monitor the stock's performance around this resistance as it plays a significant role in the short-term sustainability of the positive momentum.

Strategically, the recommendation is to maintain long positions with a trailing stop loss at 202, offering a protective measure for gains while allowing flexibility for potential upward movement. The option to buy on dips is emphasized as an opportunity to enter or augment positions at potentially lower levels. In consideration of this analysis, one might contemplate acquiring IRCON during a dip, setting a stop loss at 202, and targeting a higher level of 226. This strategic approach seeks to optimize entry points and manage risks while aligning with the observed positive market indicators, providing a comprehensive and well-informed investment strategy.

Apollo Hospitals Enterprise

Buy APOLLOHOSP in cash @ Rs 5925.90, stop-loss: Rs 5750, target: Rs 6180

APOLLOHOSP is currently exhibiting a bullish stance, with its stock price standing at 5925.90 levels. The recent formation of a robust green candle on the daily chart is indicative of a positive trend. Reinforcing this bullish outlook, the stock enjoys substantial support around 5750 levels, closely aligned with its 20 Day Exponential Moving Average (EMA).

Notably, APOLLOHOSP is trading above key moving averages, including the short-term (20 Day), medium-term (50 Day), and long-term (200 Day) EMAs, underscoring its prevailing strength. The momentum indicator, Relative Strength Index (RSI), has demonstrated a rebound from lower levels, currently positioned at 66.60, further affirming the stock's underlying strength.

This technical setup suggests a favourable environment for potential buyers, with the stock poised for upward momentum. Investors may find opportunities to capitalize on the positive trend, considering the current support levels and the rebound in RSI. The overall chart pattern and indicators present a constructive outlook for APOLLOHOSP in the near term.

Based on the above analysis we recommend buying APOLLOHOSP at CMP of 5925.90 with a stop loss of 5750 for the target of 6180.

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.