Trade Setup: Ruchit Jain of 5paisa.com Recommends 3 Stocks To Buy On Wednesday, 5th July

The Sensex began trading on Tuesday at 65,503.85 compared to the previous wrap-up of 65,205.05 and reached a new intraday record high of 65,672.97 before closing 274 points, or 0.42 per cent, higher at 65,479.05. Nifty reached a new high of 19,434.15 during the intraday session before closing with a gain of 66 points, or 0.34 per cent, at 19,389 in the closing hour. On July 4th, the Sensex and Nifty 50 reached new all-time highs thanks to FIIs, who bought Indian stocks worth Rs 2,134.33 crore and settled as net buyers on Tuesday, extending it to five straight days.

Market Outlook Today

Commenting on the performance of Nifty on Wednesday, Ruchit Jain, lead research analyst at 5paisa.com said, "Our markets continued with the recent momentum at the start of the week and opened on a positive note. Nifty continued to mark new record highs led by heavyweights and ended the day above 19300 with gains of seven-tenths of a per cent. It's been a merry run for the Bulls as there seems to be no hurdle to the ongoing momentum. The momentum readings have reached the overbought zone but quite often we see that when the trend is strong, the market continues to rally even in the overbought zone. Hence, traders should avoid taking any contra bets and continue to look for buying opportunities."

"The large cap stocks are witnessing good price volume action which is providing leadership to support the index. Since Nifty is trading at an all-time high, reciprocal retracement gives us a fair idea about the resistance ahead. With such a calculation, the immediate resistance for Nifty is seen around 19440 as it is the 127 percent retracement of the previous corrective phase. Traders are advised to watch out for how the index reacts around this hurdle and take decisions on trading positions accordingly. On the flip side, the 20 DEMA which has been the sacrosanct support in this rally is now around 18800. While the lower time frame charts indicate immediate supports around 19150 and 19025," he further added.

Stocks To Buy Today

Ruchit Jain, lead research analyst at 5paisa.com has recommended 3 stocks to buy today i.e. on Wednesday, 5th July.

Century Tex

The stock has given a breakout from a consolidation phase with good volumes. The 20 DEMA is acting as a support while RSI is indicating a positive momentum. Traders can buy in the range of Rs. 865-860 with a stoploss below Rs. 828 for short-term targets of Rs. 902 and Rs. 930.

Hindustan Unilever

The stock has recently consolidated in a range and is on the verge of a breakout above its previous swing high resistance. The RSI oscillator is hinting at a positive momentum and the volumes are gradually increasing. Short Term traders can buy above Rs. 2715 with a stoploss below Rs.2650 for short-term targets of Rs. 2780 and Rs. 2830.

Canara Bank

The Nifty PSU Bank index has given a breakout from its consolidation phase. The recent consolidation witnessed a base formation in Canara Bank and this stock too has given breakout from its resistance with good volumes. Traders can buy on dips in the range of Rs. 315-310 with a stoploss below Rs.305 for short term targets of Rs. 325 and Rs. 333.

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.