Buy or sell: Sagar Doshi of Nuvama recommends these three stocks for Wednesday


Stock Market News: Domestic benchmark equity indices, the Sensex and the Nifty 50, closed the day lower on Tuesday, mirroring unfavourable global cues, further dragged by information technology (IT) firms that are quite sensitive to the US Federal Reserve’s (US Fed) commentary and interest rate decision. 

The recent scepticism in the Indian market was prompted by the Bank of Japan’s decision to raise interest rates for the first time in 17 years, which dampened the sentiment of its Asian peers.

Also Read: Stock market today: Investors lose about 5 lakh crore in a day as Sensex, Nifty 50 fall 1% each on all-round selloff

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With today’s US Federal Reserve meeting, analysts predict that the market will continue to consolidate as caution reigns. Though the US Fed is expected to keep to its  stance  and keep the rate unchanged, its commentary will be significant since it will offer hints  the Central bank’s future rate action.

Concerns over premium valuations and the US Fed’s decision to delay rate cuts owing to higher-than-expected inflation have caused the domestic market to correct, as the dollar index has been rising. According to Vinod Nair, Head of Research at Geojit Financial Services, the steady rise in crude oil prices is also hurting market sentiment.

The 30-share BSE Sensex ended lower by 736.37 points or 1.01% at 72,012.05 level while the Nifty 50 closed at 21,817.45 level, down 238.25 points or 1.08%.

Also Read: Nifty IT index slips 2.90% to hit a 9-week low; TCS shares drop by 4.3%

Nifty 50 Outlook by Sagar Doshi, Senior Vice President- Research, Nuvama Professional Clients Group

The Nifty 50 is down half a percent so far this week after facing the worst week in the past 5 months. Broadly, the index is in the range of 21,600–22,250 on the upside. A breakdown of IT heavyweights led the pressure on the Nifty 50 in Tuesday’s session. Nifty IT could see further 3-4% selling pressure as it has given a breakdown on hourly charts. Like last week, the view on the outperformance of largecaps over the broader markets remains intact. Stocks from the NSE500 have started to appear in the 52 low list, which was not seen until the start of this month, wherein 7 stocks have made fresh 52 lows vs. 4 stocks making fresh highs from the list on Tuesday’s session, said Sagar Doshi, Senior Vice President- Research, Nuvama Professional Clients Group.

Also Read: Smallcap, Midcap indices: 4 reasons why J.P. Morgan sees 5%-10% further downside risk

Bank Nifty Outlook

Bank Nifty is open to testing 45,800 on the downside as it is trading below its support zone of 46,600, which is now dynamically acting as supply or resistance on the upside. This week is likely to remain rangebounce ahead of trucated next week, which is clubbed with monthly expiry, highlighted Doshi.

Also Read: RBI Bulletin: From GDP growth to inflation – here are five key highlights

Stock Recommendations by Sagar Doshi

On stocks to buy on Wednesday, Sagar Doshi has recommended three stocks:

Navin Fluorine International Ltd (BUY): LCP: 2,983.30; Stop Loss: 2,875.00 Target Price: 3,190.00

According to Sagar, Navin Fluorine is on the verge of completion of its threshold max drawdown (40% from highs). The buildup of positive divergence on daily charts indicates green shoots that momentum has started to arrest on the downside.

Gujarat Gas Ltd (March) (SELL): LCP: 518.45; Stop Loss: 537.00; Target Price: 482.75

Doshi stated that the stock has given a swing breakdown, also taking out its previous swing bottom level of 529.00. The absence of a higher top since February 2023 raises doubts about the structure of the stock.

Bajaj Finance Ltd (BUY) : LCP : 6,586.00; Stop Loss: 6,350.00; Target Price : 7,050.00

According to Doshi, the stock has been showing signs of outperformance in recent days. A fresh breakout was seen in the stock; it posted its highest ever close for March’24, breaking its prior swing high. A decreasing OI in the stock is indicative of a further short squeeze possible in the stock.

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: 19 Mar 2024, 07:44 PM IST


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