Trade Call: Sumeet Bagadia Recommends 2 Technical Stocks To Buy On Wednesday, 3rd Jan

On January 2, benchmark marketplaces ended lower, led by the Nifty, on negative global cues. The Nifty ended 76.10 points or 0.35 per cent lower at 21,665.80, while the Sensex ended 379.46 points or 0.53 per cent lower at 71,892.48.

Eicher Motors, M&M, UltraTech Cement, L&T, and Kotak Mahindra Bank were the top losers on the Nifty, while winners included Coal India, Adani Ports, Sun Pharma, Divis Labs, and Cipla. With the exception of media, metal, pharma, consumer durables, and oil and gas, every sector ended in the red on the sectoral front. In terms of the broader market, the BSE Midcap and Smallcap indices ended flat.

Nifty Outlook

Jatin Gedia - Technical Research Analyst at Sharekhan by BNP Paribas said, "On the daily charts, we can observe that the Nifty is in the process of retracing the rise it witnessed from 20976 - 21834. It has reached the support cluster of 21630 - 21600 where support in the form of the 40-hour moving average and 23.60% Fibonacci retracement level is placed. The consolidation can continue over the next few trading sessions and in case of a dip towards 21550 - 21500, it should be used as a buying opportunity."

Bank Nifty Outlook

"It is approaching the crucial support of 47630 where the 20-day moving average is placed. We expect the Bank Nifty to hold on to this support and consolidate before resuming the next leg of the upmove. Overall, the structure is still in favour of the Bulls," said Jatin Gedia.

Market Outlook

Osho Krishan, Sr. Analyst - Technical & Derivative Research, AngelOne said, "After a long weekend, the global bourses started the new year on a mixed note, tracking which the GIFT NIFTY suggested a mild to weak start for our markets. After the opening bell, our markets attracted a follow-up sell-off and the benchmark index drifted lower to the 21550 subzone. However, the bulls showed some resilience and made a modest recovery by the day's end to eventually settle the Nifty50 index around 21660 levels, with a mere cut of 0.35 percent."

"A series of small candle formations near the lifetime highs signifies a breather for our markets after the recent rally. Also, the market participant chose to take some money off the table, which seemed long due in our market. Technically, there are no significant alterations in the price action in the index, but brakes seem to have been applied to the recent momentum.

On the levels front, the immediate resistance is intact near 21800-21850, and a decisive breach would only trigger the next leg of rally to propel the index for another milestone. On the lower end, 21600-21500 withholds the cushion, and sustenance above the same is likely to augur well for the bulls in the near period. While a plunge below these levels could attract further correction for the 21200 zone," Osho Krishan stated.

"The upcoming FOMC meet could be seen as the next trigger for the markets to set up a near trend. Till then, some consolidation could be seen with strong support near 21500. Meanwhile, the global markets need to be watched carefully as they might dictate the near-term trend. Also, one must remain fussy with stock preferences with one step at a time approach," the analyst further added.

Stocks To Buy Today

Sumeet Bagadia, the executive director of Choice Broking, recommended buying two stocks on Wednesday, January 3, 2024. The entry price, stop loss, and target price for Sun Pharma and Voltas are as follows.

Voltas

Buy Voltas in cash @ Rs 991, stop-loss: Rs 965, target: Rs 1028

The analysis of Voltas on the daily chart indicates a bullish trend, with the stock exhibiting a higher high and higher low pattern. The recent breakout above the neckline, supported by increased trading volume, suggests a potential upward movement. The Relative Strength Index (RSI) at 81 further confirms positive momentum. Importantly, Voltas is trading above its critical 20-day, 50-day, and 200-day Exponential Moving Average (EMA) levels, reinforcing the bullish sentiment.

In light of this analysis, we recommend a long trading position in Voltas. Investors are advised to buy Voltas in the cash segment at the current market price (CMP) of 991. The target for this trade is set at 1028, with a suggested stop loss at 965 to manage potential risks. This recommendation is based on the anticipated continuation of the bullish trend indicated by the technical chart patterns and indicators.

Sun Pharmaceutical Industries

Buy SUNPHARMA in cash @ Rs 1295, stop-loss: Rs 1265, target: Rs 1344

SunPharma has recently experienced a significant breakthrough above the crucial resistance zone ranging from 1250 to 1270 on the daily chart. This breakout has been accompanied by a consolidation of the upward movement, characterized by higher highs and higher lows. The strong bullish sentiment is further validated by a noticeable surge in trading volume.

Key technical indicators, particularly the Relative Strength Index (RSI), highlight the positive momentum in the stock. The RSI not only indicates favourable trends but also aligns with the stock trading above important moving averages, including the 20-day, 50-day, and 100-day Exponential Moving Averages (EMA). This convergence underscores the continued strength in SunPharma price action.

In summary, the decisive breakout, along with encouraging volume and the positive alignment of key technical indicators, suggests a bullish outlook for SunPharma. Traders and investors may interpret this analysis as indicative of potential sustained upward momentum in the stock.

Considering the above analysis, we recommend SunPharma in cash at the current market price (CMP) of 1295, setting a target of 1344, and implementing a stop loss at 1265.

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.