Trade Call: Sumeet Bagadia Picks 2 Stocks To Buy On Tuesday, 26th Dec

On Friday, December 22, Indian benchmark indices closed higher for the second day in a row as the Nifty gained 94.40 points or 0.44 per cent to close at 21,349.40, while the Sensex surged 241.86 points, or 0.34 per cent to settle at 71,106.96. The BSE Sensex fell 0.36% and the Nifty50 fell 0.53 per cent for the week.

Top Nifty gainers were Grasim Industries, SBI Life Insurance, Bajaj Finance, HDFC Bank, and ICICI Bank; top losers were Wipro, HCL Technologies, Tata Motors, Bajaj Auto, and Hindalco Industries. Due to Christmas, the Indian stock markets will be closed on December 25. However, Choice Broking executive director Sumeet Bagadia has recommended a few stocks for Tuesday, December 26 session.

Market Outlook

Aditya Gaggar, Director of Progressive Shares said, "As pointed out in the previous weekly note, the market did correct to adjust its overbought conditions. We expect that the Index will oscillate in the wide range of 21,000-21,600. Talking about BankNifty, it is a long way to go because as per the Descending Broadening Wedge pattern breakout, the target stands at 50,250.

The Auto sector is moving in a two-step forward, one-step-back kind of movement which gives the confidence to remain bullish on the sector. At the record level, the Energy sector has formed a Spinning Top candlestick pattern which indicates indecisiveness and a potential reversal of trend.

The much-awaited Rounding Bottom breakout was observed in the FMCG sector (Britannia- Flag and Pole Breakout, GodrejCP- Higher Top Higher Bottom Formation). Our positive stance on the IT sector will continue and investors should park some money in the sector. From the Metal sector, we will remain overweight on HindCopper, NALCO, and SAIL."

Nifty Outlook

Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said, "The Nifty index displayed volatile movements on the last day of the week but managed to close above the crucial level of 21300. The lower-end support for the index is positioned at 21200, presenting a buying opportunity on any dips toward this level. Sustaining above 21300 could pave the way for further upside momentum, targeting the 21500 level."

Bank Nifty Outlook

"The Bank Nifty index faced selling pressure on the last day but managed to hold the key support level of 47400. If the index fails to sustain above this support, it could witness further decline toward the 47100 level. On the upside, the immediate resistance is at 47700, and a breakout above this level may trigger short-covering, pushing the index higher toward 48000/48200 levels," commented Kunal Shah.

Nifty's Weekly Winning Streak Halted

According to Mr. Om Mehra, Technical Analyst, SAMCO Securities, "The Nifty settled at 21,323.2, down by 0.65% in a week. This marked a pause in what had been an impressive seven-week winning streak for the index aligning with a broader global trend of deceleration ahead of the Christmas holiday. Technically, Nifty exhibited resilience by holding onto the crucial 21,000 mark following a sharp one-day decline and this level is now perceived as a strong support.

The 20-day Simple Moving Average (SMA) is hovering around the 20,830 level providing additional support. On the higher side if it breaks 21,600, Nifty might attempt to test new highs around the 21,750-21,800 zone. The Relative Strength Index (RSI) adds another layer of insight ass it's consistently maintaining levels above 70."

"However, caution is advised as certain sectors appear to be in overbought territory potentially setting the stage for profit-booking. This could notably impact mid and small-cap equities. While Bank Nifty ended the session at 47,491.85 down by 1.35% in a week. Immediate support remains at 46,600 while resistance is placed at the 48,220 level. The India VIX, which is referred as the fear gauge, is holding above 13.5 levels, indicating an upcoming rise in volatility," the analyst further added.

Stocks To Buy

On Tuesday, December 26, Choice Broking's executive director Sumeet Bagadia advised purchasing two stocks. These are the entry price, stop loss, and target price for Schaeffler India and Hindalco Industries.

Schaeffler India

Buy SCHAEFFLER in cash @ Rs 3175, stop-loss: Rs 3082, target: Rs 3315

SCHAEFFLER has undergone a correction following its intermediate high of 3725 in September 2023. However, the stock recently demonstrated a shift in trend dynamics by finding support around the 3011 levels. This level aligns closely with the 50-day and 100-day Exponential Moving Averages (EMA), indicating a potential reversal in the prevailing trend. Subsequently, the stock has exhibited a rally, forming higher tops and higher bottoms, further validating the positive momentum.

A notable breakout from a trading range occurred yesterday, albeit with relatively modest average volumes. Despite this, technical indicators are portraying favourable signals, with the stock currently trading above the 50-day, 100-day, and 150-day EMA levels. The overall intermediate technical setup augurs well for potential upward movement in the coming days.

Based on the above analysis we recommend buying SCHAEFFLER at CMP of 3175 with a stop loss of 3082 for the target of 3315.

Hindalco Industries

Buy HINDALCO in cash @ Rs 570, stop-loss: Rs 552, target: Rs 604

HINDALCO is currently trading at Rs 570. The stock has formed a new higher high and higher low, accompanied by significant volume. There are expectations of further upward movement, potentially reaching Rs 552 levels. On the downside, substantial support is evident near Rs 604.

Furthermore, HINDALCO 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 73.5, 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 HINDALCO may have the potential to achieve a target price of Rs 604 in the near term.

To manage risk effectively, it is advisable to set a stop-loss (SL) at Rs 552 to protect the investment in case of an unexpected market reversal. A prudent strategy involves considering buying opportunities on market dips at levels of Rs 560.

In summary, considering the technical analysis and prevailing market conditions, HINDALCO appears to present a promising buying opportunity for those targeting a Rs 604 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.