Trading Guide: 2 Buy/Sell Stock Recommendations By Sumeet Bagadia On Wednesday, 20th March

The benchmark Nifty fell below the crucial 22,000 level to close at a one-month low as the Indian stock market ended on a negative note. The extent of the sell-off was sufficiently severe that Nifty IT, Pharma, and FMCG all fell by around 2%, with not one sector able to close in the green. Consequently, the India VIX surged beyond the 14 levels and closed at 14.11, up 1.56% from the previous closing of 13.90. The Nifty was down 238 points to 21,817, and the Sensex completed the trading day down 736 points at 72,012. A significant 191-point drop was also seen in the Nifty Bank index, which closed at 46,389, and a 575-point decline in the Midcap index, which closed at 45,926. Profit booking was observed for defensive stocks, with IT, FMCG, and Pharma having the most laggards. With the US Fed meeting underway and the Bank of Japan hiking interest rates for the first time in 17 years, the market is expected to stay in a consolidation pattern.

Nifty Outlook

"The put writers (Bulls) finally exited from the 22,000 Strike in Nifty. At the same time, call writers (Bears) aggressively built (created) short positions. This led to an huge Intraday fall in the Index. Nifty has also closed below the 50 EMA of 21,864 for the first time since 13th November 2023. The put writers (Bulls) have sizeable positions at the 21,800 Strike and the option activity at the 21,800 Strike will provide cues about Nifty's future direction," said Mr. Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities.

"Technically, Nifty showcased a bearish candle on the daily chart. The hourly chart forming lower lows and lower highs indicating that Bears are tightening their grip. The Index has slipped below the 50 DMA (Day Moving Average) and the RSI (Relative Strength Index) is now skewed more towards on the negative side. Now the important support for Nifty remains at 21,650 levels while the resistance is placed at 22,050," said Om Mehra, Technical Analyst, SAMCO Securities.

Bank Nifty Outlook

"Bank Nifty opened with a gap down and fell further before recovering marginally at the fag-end of the session to close at 46,385, down 191 points. Heavy call writing (Bear activity) was observed at the key strike of 46,500 followed by 46,400 & 46,300. This will be the third consecutive day for Bank Nifty closing below the 50 EMA & 5th doji candle in the last 6 trading sessions. The immediate support for Bank Nifty is placed at the 46,000 Strike and the option activity at this strike will provide cues about Bank Nifty's future direction," added Ashwin Ramani.

"Bank Nifty concluded the session at 46,384.80 posting a decline of 0.41%. A notable correction in the RSI dropping from Monday's close of 47 to 44 on Tuesday signals a potential shift in trend. According to Fibonacci retracement, immediate support levels for Bank Nifty remains at 45,850 followed by 45,250 while resistance remains at 47,000 levels," further added Om Mehra.

Stocks To Buy Today

Sumeet Bagadia, Executive Director of Choice Broking, recommended a trading plan for ICICI Bank and Torrent Power shares on March 20.

ICICI Bank

Buy ICICIBANK in cash @ Rs 1083.95, stop-loss: Rs 1060, target: Rs 1130

ICICI Bank has demonstrated noteworthy resilience, staging a rebound from a pivotal support level at 1060, in close proximity to its 20-Day Exponential Moving Average (EMA). The stock, currently trading at 1083.95, exhibits a positive trajectory, indicative of underlying strength. Significantly, trading above key moving averages reinforces the stock's robust position.

An observable hurdle surfaces around 1100, constituting a minor resistance. A successful breach of this level holds the potential to propel the stock towards the target of 1130 and beyond. This analysis reflects the stock's resilience, technical strength, and the possibility of continued upward movement, offering valuable insights for investors navigating the dynamic market landscape.

Based on the above analysis we expect ICICIBANK to move higher towards 1130 and hence we recommend buying ICICIBANK at a CMP of 1083.95 with a SL of 1060.

Torrent Power

Buy TORNTPOWER in cash @ Rs 1264, stop-loss @ 1212, target @ 1333

TORNTPOWER is currently trading near its all-time high at Rs 1287.5, showcasing a pattern of establishing an ascending triangle breakout, accompanied by robust trading volume. This trend signals strong momentum in the stock. There is potential for TORNTPOWER to attain a target price of Rs 1333 in the near term, making it advisable to consider purchasing on dips, particularly around Rs 1249.

Furthermore, TORNTPOWER is positioned above key Exponential Moving Averages (EMAs), including the 20-day, 50-day, 100-day, and 200-day EMAs. This alignment above these crucial EMAs enhances the bullish outlook, suggesting the possibility of a sustained upward price movement.

To effectively manage risk, it is recommended to implement a stop-loss (SL) at Rs 1212. This precautionary measure is crucial to safeguard your investment in the event of an unexpected market reversal.

In summary, considering the technical analysis and current market conditions, TORNTPOWER appears to present an attractive buying opportunity for those aiming for a Rs 1333 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.