Trade Call: Sumeet Bagadia Recommends 2 Stocks To Buy/Sell On Tuesday, 19th Dec

Due to poor Asian and European cues, the Indian benchmark indices paused their three-day winning streak on Monday and closed down. The Nifty dropped 38.00 points, or 0.18 per cent at 21,418.70 at closing, while the Sensex plummeted 168.66 points, or 0.24 per cent to settle at 71,315.09.

Top gainers on the Nifty were Bajaj Auto, Adani Ports, Sun Pharma, Hindalco Industries, and Reliance Industries, while top losers were Power Grid Corporation, JSW Steel, ICICI Bank, ITC, and Tech Mahindra. On the sectoral front Nifty media followed by pharma and consumer durables were the top performers whereas the top losers were realty, PSU Bank and private banks. The BSE Midcap index climbed by 0.3 per cent, while the smallcap index saw a 0.5 per cent gain in broader indices.

Market Outlook

"A rangebound trade comes to an end at 21,418.65 with a loss of 38 points. Among the sectors, Media and Pharma were the outperformers while Realty and Banking indices have experienced a corrective move in the form of profit booking. With gains of 0.22% and 0.56%, Mid and Smallcaps outperformed the Benchmark Index.

On the daily timeframe, the Index has formed an Inside Bar DOJI candlestick pattern which indicates a rangebound activity can be expected with the downside being protected at 21,330 while 21,500 will act as a resistance level," said Mr. Aditya Gaggar Director of Progressive Shares.

Nifty Outlook

Mr. Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities said, "Nifty opened with a gap down but recovered quickly and consolidated throughout the day to close at 21,419, down 38 points. The Futures Open Interest (OI) indicated unwinding of long positions in Nifty futures. The India VIX, known as the fear indicator, rose 5.8% to 13.90 on Intraday basis, gave discomfort to the bulls. The call writers strengthened their position at the maximum call open interest strike of 21,500 in Nifty today. This indicates that the resistance has become stronger at the 21,500 Strike in the Index. The strong ongoing bullish rally is likely to continue if call writers exit & put writers enter aggressively at the 21,500 Strike."

Mr. Om Mehra, Technical Analyst, SAMCO Securities said, "Benchmark Indices experienced substantial swings on both sides but were unable to cross above the closing of the previous day. Nifty ended at 21,418.65 slipping 38 points or 0.18%. Among the Nifty constituents, 16 stocks advanced while 34 declined. On the sectoral front, the leading gainer was Nifty Media up by 1.18% while Nifty Realty experienced losses nearly 1 percent. On the technical front, Nifty formed bearish harami pattern on the daily chart leading to the bearish sentiment. The regression channel on the hourly chart indicates that the immediate support is at 21,230 levels and the resistance is placed at 21,500."

Rupak De, Senior Technical analyst at LKP Securities said, "On the daily chart, the Nifty has formed a Bearish Harami candlestick pattern, suggesting a potential interruption in the ongoing rally. Additionally, the RSI indicator on the hourly timeframe has undergone a bearish crossover within the oversold zone, hinting at a waning bullishness in the market. A decline below 21350 could lead a correction towards 21220/21100 in the short term. Conversely, resistance is anticipated at 21500 on the higher end."

Bank Nifty Outlook

Ashwin Ramani said, "Bank Nifty moved in a sideways range throughout the day to close at 47,868, down 276 points. The call writers aggressively built more positions at the maximum call open interest strike of 48,000 in Bank Nifty. The option activity at 48,000 Strike will provide cues about future direction of Bank Nifty."

Mr. Om Mehra said, "The Bank Nifty ended the day at 47,867.70, down 0.57%, after forming a dark cloud on the daily candlestick pattern chart, indicating a bearish trend. Profit booking from higher levels was specifically observed in PSU banking and private banking stocks. The index remained beneath the middle Bollinger band in the hourly chart as immediate support remains at 47,500 followed by 47,200 levels while resistance is placed at 48,150. We anticipate the market to remain sideways over the next few days, as the second half of December typically witnesses a shrink in volumes."

Kunal Shah, Senior Technical & Derivative analyst at LKP Securities said, "The Bank Nifty index encountered resistance around the 48000 level, resulting in an inability to sustain at those higher levels, leading to some selling pressure. The immediate support for the index is positioned at 47800. A breach below this level could intensify the selling pressure, potentially pushing the index towards the 47400/47000 marks".

Stocks To Buy Today

On Tuesday, December 19, Choice Broking's executive director Sumeet Bagadia recommended buying two stocks. Here are the entry price, stop loss, and target price for Granules India and Oracle Financial Services Software.

Oracle Financial Services Software

Buy OFSS in cash @ Rs 4375: stop-loss @ Rs 4242, target @ Rs 4647

OFSS, currently trading at Rs 4375, has recently broken out of cup and handle pattern, indicating a strong uptrend. The immediate resistance is near the Rs 4500 level, and the current price is exhibiting strong bullish momentum, expected to continue towards the Rs 4647 level. On the flip side, there is strong support near Rs 4242.

Moreover, OFSS is trading above key Exponential Moving Averages (EMAs), including the 20-day, 50-day, 100-day, and 200-day EMAs, indicating robust bullish momentum and suggesting potential for further upward price movement. The Relative Strength Index (RSI) is presently at 68.4, showing an upward trajectory and indicating increasing buying momentum. Additionally, the Stochastic Relative Strength Index (Stoch RSI) exhibits a positive crossover. These technical indicators collectively suggest that OFSS may have the potential to reach a target price of Rs 4647 in the near term.

To manage risk effectively, it is advisable to set a stop-loss (SL) at Rs 4242 to safeguard the investment in the event of an unexpected market turn. A prudent strategy would be to consider buying on dips at levels of Rs 4330 and Rs 4280.

Overall, considering the technical analysis and current market conditions, OFSS presents a promising buying opportunity for those aiming for a Rs 4646 price target, provided that prudent risk management measures are in place.

Granules India

Buy GRANULES in cash @ Rs 402.3, stop-loss @ Rs 390, target @ Rs 426

GRANULES, currently trading at Rs 402.3, has recently broken out of range, indicating a strong uptrend. The immediate resistance is near the Rs 415 level, and the current price is exhibiting strong bullish momentum, expected to continue towards the Rs 426 level. On the flip side, there is strong support near Rs 390.

Moreover, GRANULES is trading above key Exponential Moving Averages (EMAs), including the 20-day, 50-day, 100-day, and 200-day EMAs, indicating robust bullish momentum and suggesting potential for further upward price movement.

The Relative Strength Index (RSI) is presently at 66.6, showing an upward trajectory and indicating increasing buying momentum. Additionally, the Stochastic Relative Strength Index (Stoch RSI) exhibits a positive crossover. These technical indicators collectively suggest that GRANULES may have the potential to reach a target price of Rs 426 in the near term.

To manage risk effectively, it is advisable to set a stop-loss (SL) at Rs 390 to safeguard the investment in the event of an unexpected market turn. A prudent strategy would be to consider buying on dips at levels of Rs 396.
Overall, considering the technical analysis and current market conditions, GRANULES presents a promising buying opportunity for those aiming for a Rs 426 price target, provided that prudent risk management measures are in place.

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.