Trade Call: 2 Technical Stock Picks By Sumeet Bagadia On Tuesday, 12th March

Following a gap-up opening on Monday, Nifty saw heavy selling pressure throughout the day and ended the day 161 points down at 22,333. The India VIX index, surged 2.81% intraday to 13.99, unseating the bulls. Throughout the day, Nifty showed signs of weakness and saw a severe sell-off; it closed at 22,333, down 0.72 per cent. The majority of sectors had a significant sell-off as they concluded in a downward trend. The small-cap index arrived at the day down about 2%, while the BSE mid-cap index closed 93.91 points, or 0.24%, down at 39,758.94, indicating that selling pressure was once again noticeable in the broader market.

Nifty Outlook

"On the daily charts we can observe that Nifty has not witnessed follow through buying interest after a decisive breakout. It is witnessing selling pressure at higher levels. This could result in Nifty slipping back into the consolidation zone 22100 - 22600. The daily Bollinger bands are contracting indicating a range contraction and is likely to result in a range bound price action going ahead. The expectation of trending moves on the upside is fading away in the absence of strength from the key heavyweights of the index. In terms of levels, 22224 - 22167 is the crucial support zone while 22530 - 22600 is the immediate hurdle zone from short term perspective," said Jatin Gedia - Technical Research Analyst at Sharekhan by BNP Paribas.

Rupak De, Senior Technical Analyst, LKP Securities said, "Nifty has been fluctuating within an ascending channel, displaying a pattern of higher highs and higher lows. The overall trend continues to be bullish, although there is currently an intermediate corrective phase in progress. In the short term, Nifty could experience weakness, possibly leading to a decline toward the range of 22200-22250. Looking at the upside, immediate resistance is identified at 22400 based on closing prices."

Bank Nifty Outlook

"Bank Nifty filled the gap created on the 17th January and thereafter has been unable to carry on the positive momentum. On the downside it can slip towards the 46900 - 46800 where support in the form of 50% Fibonacci retracement level of the rise from 45662 - 48161 and the 20-day moving average (46818) is placed," Jatin Gedia further added.

"Bank Nifty cracked 508 points on Intraday basis to close at 47,328. Bank Nifty has given a lower close on the daily chart, meaning today's close is lower than previous day's low. The put writers (Bulls) exited from the 48,000 Strike in Bank Nifty, leading to a strong down move. The call writers (Bears) built significant positions at the 47,500 Strike in the Index. The option activity at the 47,500 Strike will provide cues about Bank Nifty's future direction," said Mr. Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities.

"Bank Nifty concluded the session at 47,327.85, declining by 1.06%. The index has formed a bearish candle with a large body, signalling potential weakness. Both private and PSU banking stocks remained weak in today's session. RSI slipped from 63 to the 56 level. The support is placed at 46,800, followed by 46,600 levels, while the resistance remains at 47,800. The Index remained beneath the middle Bollinger band. The overall structure looks weak in the short term," stated Om Mehra, Technical Analyst, SAMCO Securities.

Stocks To Buy Today

Sumeet Bagadia, Executive Director of Choice Broking, issued trading recommendations for two stocks on March 12. The pathway to the comprehensive technical analysis of Godfrey Phillips India and KEC International is provided below.

Godfrey Phillips India

Buy GODFRYPHLP in cash @ Rs 3637.05, stop-loss: Rs 3499, target: Rs 3875

GODFRYPHLP daily chart analysis offers a favourable view for the following week, indicating a steady higher advance. Notably, the stock has produced a notable higher high and higher low pattern, and the company's recent upward swing has effectively violated the neckline, establishing a new week high. This breakthrough indicates the possibility of a significant follow-through upward increase in the stock price.

Adding to the positive momentum, there has been an increase in trading volume, indicating growing market interest. The stock formed a strong bullish candle signifying a potential continuation of the uptrend following and the daily strength indicator RSI (14) is moving upwards and positioned above its reference line indicating a positive bias. Furthermore, GODFRYPHLP is currently trading above its crucial 20-day, 50-day, and 100-day Exponential Moving Average (EMA) levels, reinforcing the bullish trend. Given the overall chart pattern, the analysis suggests a favourable long trading opportunity for investors.

Based on the above analysis we recommend buying GODFRYPHLP in cash at a CMP of 3637.05 for the target of 3875 with a stop loss of 3499.

KEC International

Buy KEC in cash @ Rs 748.4, stop-loss: Rs 731, target: Rs 794

KEC is currently trading at Rs 748.4. After a period of small falls and sideways consolidation, the stock has lately broken the neckline levels of Rs 730 and is rising quickly on the upside with substantial volume. There are expectations of further upward movement, potentially reaching Rs 794 levels. On the downside, substantial support is evident near Rs 730.

Furthermore, KEC is trading above key Exponential Moving Averages (EMAs), including the 20-day, 50-day, 100-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 66.28, signalling an upward trajectory and confirming an increase in buying momentum.

Additionally, the Stochastic Relative Strength Index (Stoch RSI) exhibits a positive crossover. These technical indicators collectively support the notion that KEC may have the potential to achieve a target price of Rs 794 in the near term.

To manage risk effectively, it is advisable to set a stop-loss (SL) at Rs 731 to protect the investment in case of an unexpected market reversal.

In summary, considering the technical analysis and prevailing market conditions, KEC appears to present a promising buying opportunity for those targeting a Rs 794 price objective, contingent upon the implementation of prudent risk management measures.

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.