Weekly Trading Guide By Motilal Oswal: 3 Technically Strong Stocks To Buy

In contrast to the Sensex, which gained 803.14 points (1.26%) and closed at 64,718.56, the Nifty ended with gains of 213 points (+1.1%) at 19186 levels, supported by robust global data, healthy FII buying, and highest delivery in key companies, notably HDFC. On the final day of the June series and the first day of the July series, the index reached all-time high levels. On Friday, the final day of the trading week, the Sensex and Nifty both reached new lifetime highs. Benchmark indices saw their best weekly gains in fact the week for every sector saw growth, with Nifty Pharma, Auto, and IT seeing the most gains.

Market Outlook

Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd said "Sensex, Nifty scaled fresh lifetime highs and ended the last day of the truncated trading week at record closing levels on Friday. On a weekly basis, Benchmark indices logged the highest gains in over 11 months. All sectors advanced this week with Nifty Pharma, Auto and IT gaining the most. India's current account deficit (CAD) for Q4FY23 came at 0.2% of GDP at just $1.3bn, the lowest since Q1FY22. Full year CAD comes at 2% of GDP or $67bn as compared to 1.2% at $38.7bn YoY. India's non-software services exports growth, rising inflows from Indians living abroad and remitting money at home to their families have enabled a lower Current account deficit for India."

RBI Financial stability report shows the gross non-performing asset (GNPA) ratio of banks fell to a 10-year low of 3.9% while the Net Non-performing assets (NNPA) ratio of banks declined to 1% in March 2023. Bad loans in the banking system below 4% fell to a decadal low in March, expected to fall further. The primary market is back in action after a period of lull, with a flurry of IPOs in the pipeline. Investors are kept busy as not just the mainboard, but also many SME IPOs are hitting the market. A total of seven companies launched their IPO this week, three from the mainboard and four in the SME segment," said Arvinder Singh Nanda.

"On the global front, crude oil inventories in the US decreased by 2.40mn barrels, after falling by 1.24mn barrels in the previous week. US Q1 GDP grew at 2% annually, and China's June manufacturing PMI came at 49 as compared to 48.8 in May and 49.2 in April. In the coming days, India's manufacturing and services PMI data will be in focus, Globally Euro, UK and US will also be sharing their Manufacturing and Services PMI numbers, US Initial Jobless claims, non-farm payrolls, India's forex reserve data will be the key events that will drive the market next week," he stated.

"The Nifty index witnessed remarkable strength, surging by 2.80% to establish an all-time high at 19201.70. Similarly, the Sensex also displayed significant gains, rising by nearly 2.76% to form a fresh all-time high at 64768.58. The initial market sentiments are currently favorable, with the "buy the dip" strategy being observed. Looking ahead, the Nifty prices seem poised to continue their upward trajectory towards the levels of 19400 and 19500. In the event of any correctional fall, approximately around the 19000 mark, it may present an opportunity to initiate fresh long positions.It is worth noting that a reversal in the bullish trend will only occur if prices drop below the crucial support level of 18750, which is in the vicinity of the 21-day EMA," stated Arvinder Singh Nanda.

"Bank nifty prices also witnessed a similar trend to the broader market. Prices reached an all-time high at 44787.10, concluding the week with a notable gain of 2.58%. Looking ahead, the Bank nifty prices are looking to pave the way for 45200 and 45500. We believe any correctional decline for 44400 and 44500 may provide an opportunity to establish fresh long positions. However, it is important to remain cautious, as a sustainable fall below the support level of 44200 could potentially impact the current bullish sentiments," he further said.

Stocks To Buy This Week

Here are the 3 stock recommendations with a buy call shared by the Technical & Derivatives team, Broking & Distribution, Motilal Oswal Financial Services Ltd.

Axis Bank

BUY AXIS BANK CMP 987, stop-loss 960, target 1060

Axis Bank is in an overall uptrend and forming higher highs - higher lows on a monthly scale from the past three months. On a weekly scale, the stock has retested its previous breakout zone and formed a strong bullish candle. On a daily scale as it is holding well above its 20 DEMA and gave the highest close ever. Thus recommending to buy the stock with keeping the stop loss below 960 levels for an upside target towards new life highs of 1060 zones.

Larsen and Toubro Ltd

BUY LARSEN & TOUBRO LTD CMP 2475, stop-loss 2400, target 2625

Larsen has given a range breakout on a weekly scale after nine weeks and formed a strong bullish candle. On a daily scale, it has managed to close above its crucial zone of 2420 marks and gave the highest daily close ever with strong outperformance in capital good space. RSI is also moving northward which suggests momentum is likely to continue in the coming session to scale new record highs. Thus looking at the current chart structure we recommend to buy the stock with a stop loss below 2400 for an upside target towards new life high of 2625 levels.

Maruti

BUY MARUTI CMP 9789, stop-loss 9500, target 10400

Maruti has formed a strong bullish candle on a monthly scale and is on the verge of major breakout zones. On a weekly scale, it has retested its previous breakout zone and gave the highest weekly close ever. On a daily scale, it has given a falling supply trend line breakout and formed higher lows from the past three sessions with a surge in volumes. Thus recommending to buy the stock with keeping stop loss below 9500 for an upside move towards new high territory towards 10400 levels.

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.