Buy or Sell: Ruchit Jain of 5paisa recommends these two stocks to buy on Tuesday

Given the short week and the monthly expiry of futures, market experts anticipate some volatility, but the Nifty 50, as per analysts, would probably consolidate at higher levels. Furthermore, investors would be busy during this truncated week with US GDP data, other important economic data, and the opening of one mainboard IPO and a few SME IPOs. 

Also Read: Holi 2014 to Holi 2024: Nifty 50 zooms over 200%, these 14 stocks skyrocket 3,900%

Last week, the domestic market as a whole did better. The biggest declining sector was the information technology (IT) sector, with increases in the real estate, auto, metal, energy, public sector undertakings (PSU), banks, media, and oil and gas sectors. Domestic institutional investors (DII) were net buyers of ₹19,251 crore, while foreign institutional investors (FII) were net sellers of ₹8,365 crore.

Before ending the week in the green, the domestic benchmark indices, the Sensex and Nifty 50, saw a roller coaster ride last week. At first, increasing concerns about froth gathering in the midcap and smallcap sectors caused prices to drop to a five-week low. The week ended with the Nifty 50 and Sensex closing at 22,096.75 and 72,831.94, respectively, up 0.39% and 0.26%. Arvinder Singh Nanda, Senior Vice President of Master Capital Services Ltd, said that the market did, however, see a resurgence as bargain hunters entered the market after the US Federal Reserve announced a possible series of interest rate cuts throughout the year.

Also Read: Cochin Shipyard share price soars 298% in one year; can this upside momentum continue?

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Market Review and Outlook – Ruchit Jain

In the week gone by, our markets initially corrected and almost tested the 21,700 mark during mid-week. However, the upmove in the global markets post the US Fed policy outcome led to a recovery in our markets too, and the Nifty 50 ended the week around 22,100 with marginal gains week-on-week, said Ruchit Jain, Lead Research Analyst at 5paisa.

The Nifty 50 witnessed a pullback move in the last couple of sessions, mainly because of the up move in global markets post-US Fed policy decision. Our markets had already seen a correction ahead of this event, and the momentum readings were oversold on the lower time frame charts.

Thus, this event became a trigger for the pullback, which is usually seen from such an oversold zone. Now, the hourly readings are positive, but the daily readings have not yet given a positive crossover. Hence, as of now, we read this upmove as a pullback only; also, since FIIs still have the majority of the positions on the short side, it’s still too early to say that the corrective phase is over and the markets have bottomed. The 61.8 percent retracement of this recent correction is around 22,220, which would be the important resistance level, explained Ruchit.

On the lower side, 21,850–21,800 is the immediate support zone. A move beyond these boundaries would then lead to a directional move in the near term. Although some of the stocks from the broader markets have started witnessing good price volume action and thus traders should take a stock-specific approach and look to trade in such outperforming counters, advised Jain. 

Also Read: Stock market holiday: NSE, BSE to remain shut today on account of Holi

Stocks To Buy Tomorrow – Ruchit Jain

On stocks to buy tomorrow, Ruchit Jain recommends two stocks – Sun Pharmaceutical Industries Ltd and FSN E-Commerce Ventures Ltd (Nykaa).

Sun Pharmaceutical Industries Ltd

Ruchit stated that the stock has been forming a ‘Higher Top Higher Bottom’ structure and is thus in an uptrend. The recent price-up move has been supported by good volumes, whereas the volumes on corrections are low, which is a positive sign. The stock has bounced from its 40 DEMA support, and hence, positional traders can look to buy the stock in the range of ₹1,608–1,600 for potential targets of ₹1,660 and ₹1,700. The stop loss on long positions should be placed below ₹1,540.

FSN E-Commerce Ventures Ltd (Nykaa)

Jain explained that the stock has given a breakout from a falling trendline resistance, and the RSI too is hinting at positive momentum. Prices have also surpassed the 40 DEMA hurdle, and hence, short-term traders can look for buying opportunities. Traders can buy the stock in the range of ₹163–161 for potential targets of ₹173 and ₹180. The stop loss on long positions should be placed below ₹153.

Also Read: Wall Street week ahead: Investors’ focus on Fed speakers, PCE index

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 25 Mar 2024, 11:39 AM IST