Trade Call: 2 Stock Picks By Sumeet Bagadia On Friday, 16th Feb

On February 15, Indian benchmark indices closed higher for the third straight day on the back of encouraging global cues. The Nifty gained 70.80 points, or 0.32 per cent to close at 21,910.80, while the Sensex surged 227.55 points, or 0.32 per cent, to settle at 72,050.38. The Nifty Bank index closed 0.7 per cent higher at 46,218.90, having bounced back from the day's low of 45,590.20.

Top losers on the Nifty were Axis Bank, Apollo Hospitals, ITC, HUL, and Britannia Industries, while top gainers were M&M, BPCL, ONGC, NTPC, and Power Grid Corporation. On the sectoral front, all sectors ended in green except FMCG, media and pharma sectors. The BSE Midcap and Smallcap indices were up 0.93% and 1.24%, respectively, on the broader market front.

Bulls Make a Comeback

According to Mr. Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities, Nifty opened with a gap up and came under intense selling pressure before consolidating in a range for nearly three hours only to breakout on higher side towards the end to close at 21,911, up 71 points.

The Foreign Portfolio Investors (FPIs) Long-Short ratio activity remained subdued since last three days. The ratio stood at 35.99% on 14th February. The FPIs still hold more short positions relative to long positions in Index futures.

Both the call & put writers battled out at 21,900 Strike in Nifty. The call writers lead the put writers marginally at 21,900 Strike in Nifty. The support at 21,700 & 21,800 Strike has become stronger owing to (Bulls') strong put writing today. Nifty is likely to move higher and gain momentum if the call writers (Bears) exit from the 21,900 & 22,000 Strike.

Bank Nifty shrugged off its initial weakness and rose steadily throughout the day to close at 46,219, up 311 points. Strong put writing (Bulls activity) was observed at 46,000 Strike in Bank Nifty. The put writers (Bears) have dethroned the call writers from the 46,000 Strike. Call writers (Bears) have sizeable positions at the 46,200 Strike in Bank Nifty and the option activity at this strike will provide cues about Bank Nifty's Intraday direction on Friday.

Nifty Secures Third Consecutive Gains, Bank Nifty Eyes Breakthrough at 46,600

Mr. Om Mehra, Technical Analyst, SAMCO Securities said Nifty notched a winning three-day streak, concluding at 21,910.75 registering a 0.32% gain. Despite trading in a narrow band, the index fortified its position around 21,800 supported by a robust volume profile.

The rally found steadfast backing from key sectors, namely Nifty PSE, Oil & Gas and Auto, driving the bullish momentum. The daily chart reveals a bullish candle and remains above 20-day Simple Moving Average (SMA). Alongside, the hourly chart revealed a pattern of higher highs and higher lows, signalling sustained positivity.

However, three Nifty 50 constituent stocks-HUL, HDFCBANK and UPL hit 52-week lows in recent sessions suggesting that the breadth is weakening this week.

Bank Nifty closed at 46,218.90, showcasing a 0.68% uptick. Notably, the MACD indicators underwent a significant transition shifting from a neutral stance to a positive trajectory. The anticipation among investors persisted for a decisive directional shift after breaking of the crucial 46,600 range. The volume profile analysis revealed substantial support at 45,600, setting the stage for the upcoming trading session.

The broader banking sector experienced a boost, propelled by the robust performance of PSU banking stocks.

Stocks To Buy Today

On Friday, February 16, Choice Broking's Executive Director Sumeet Bagadia recommended purchasing shares of Delhivery and GMM Pfaudler.

GMM Pfaudler

Buy GMMPFAUDLR in cash @ Rs 1388.10, stop-loss: Rs 1347, target: Rs 1440

GMM Paddler Limited (GMMPFAUDLR), currently priced at Rs 1388.10, is attracting attention in the technical landscape. The stock's Relative Strength Index (RSI) stands at 34, indicating an oversold condition that often precedes a potential reversal in price direction.

With resistance noted at Rs 1410, investors may consider a cautious approach. A stop-loss at Rs 1347 is advised to manage potential downside risks, while a target of Rs 1440 suggests an optimistic outlook for potential gains.
Adding to the bullish sentiment is a bullish candlestick pattern, further supporting the notion of a potential reversal in GMMPFAUDLR's price trend.

In conclusion, GMMPFAUDLR's technical indicators, including the oversold RSI and bullish candlestick pattern, indicate a possible reversal in its price trend. Investors may find it prudent to monitor price movements closely and consider their entry and exit points carefully to capitalize on potential gains.

Delhivery

Buy DELHIVERY in cash @ Rs 460.70, stop-loss: Rs 448, target: Rs 487

Delhivery, currently priced at Rs 460.70 for cash transactions, presents an appealing opportunity for investors. The stock's Relative Strength Index (RSI) stands at 61, indicating stable market sentiment. Moreover, it maintains consistent performance above key Exponential Moving Averages (EMAs), such as the 20-day, 50-day, 100-day, and 200-day averages.

While Delhivery encounters resistance around the Rs 471 level, it benefits from support generated by a bullish candlestick pattern, suggesting a potential shift towards bullish momentum.

For investors evaluating Delhivery, a cautious strategy is recommended. Purchasing at current levels, with a stop-loss set at Rs 448, offers protection against potential market downturns. The target price of Rs 487 reflects an optimistic outlook for potential returns.

In conclusion, Delhivery presents a favorable investment opportunity, supported by its stable RSI, consistent EMA performance, and bullish chart pattern. By implementing prudent risk management measures and strategic entry points, investors can position themselves to capitalize on potential upward movements in Delhivery's stock price.

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.