Buy/Sell: 3 Day Trading Calls By VLA Ambala On Friday, 9th Feb

The major indices Nifty and Sensex experienced a slump of nearly 1% during the intraday trading on Thursday. The banking stocks, especially the private banking stocks witnessed a substantial selling pressure with almost a 2.5% decline during the intraday. Interestingly, several PSU stocks recorded a significant surge following the positive comment by the Parliament concerning the PSU sector stocks.

Following the interim Union Budget and the US Federal Open Market Committee (FOMC) FOMC meeting, the Reserve Bank of India MPC's decision on the repo rate was the most anticipated event in the market. However, the RBI chose to keep the repo rate unchanged at 6.5%, aligning with the trend set by the US FOMC.

However, the RBI has expressed some hopes on CPI data, saying that they expect the CPI inflation would come in at 5.3% in FY2024, with a sub-5 % projection for the fourth quarter. The projected figures highlight a decrease in the inflation level compared to the previous year's rate of inflation.

In addition, the RBI has projected the CPI inflation at 4.6% in FY2025. Regardless of these positive projections, the stock market did not react favorably to the unchanged repo rate. This, in turn, triggered a negative reaction in the index prices.

Technical Review of the Stock Market

The Nifty formed a bearish candlestick pattern known as the 'Double Top' at the daily timeframe, along with the formation of another bearish pattern - 'Bearish Belt Hold.' It should be noted this development occurred after a previous bearish candlestick pattern formation - 'Hanging Man,' while a 'Bearish Belt Hold' occurred at the previous weekly candlestick. This combined formation of bearish candlestick patterns indicates a potential downward trend in Nifty in the upcoming days.

Moreover, Nifty's current RSI stands at 54 on the daily timeframe, 68 on the weekly, and 72 on the monthly time frame. Given the higher time frames remain in the overbought zone, it is likely to trigger profit booking, which means traders can expect a pullback. In my experience, this is the time to remain cautious when investing and sticking to only quality stock. Additionally, I advise traders and investors to diversify their portfolios and adopt the hedging strategy to spread the associated risks. As for those planning fresh investments, my advice would be to park money into stocks in parts to cushion the risks.

In addition, the Nifty formed a 'Doji' candlestick at the monthly timeframe in January 2024, and we are currently trading in proximity to the closing price, showing the significance of the current market level.

Given the current market conditions, Nifty's major support has shifted to the 21,410-21,220 range at the weekly timeframe. With the current index price trading at 21,760, the market anticipates a deep gap opening of nearly 0.5% - 1%. However, if it does not occur, the market could observe a continuity in the selling sentiment.

Key Levels to Watch on February 9, 2024

The Nifty's support range could lay between 21550 and 21420, whereas the index's major resistance point for intraday trading can be between 21800 and 21920. In the case of Bank Nifty, the intraday support levels can be found at the 44800 and 44380 levels, with resistance between 45400 and 45750.

Stocks To Buy Today

Stocks to Buy or Sell Today: VLA Ambala (SEBI Regd. Research Analyst) has recommended that traders and investors check out these three stocks on - February 9, 2024. According to her analysis, the three stocks- HAL, TATACOMM, and PRADEEP, can offer significant growth potential.

1. HAL

• TRADE TYPE: BUY
• ENTRY PRICE RANGE: Rs. 3100 - Rs. 3105
• TARGET 1: Rs. 3250
• TARGET 2: Rs. 3400
• TIME PERIOD: 10 - 12 Working days
• STOP LOSS: Rs. 2900

2. TATACOMM

• TRADE TYPE: BUY
• ENTRY PRICE RANGE: Rs. 1760 - Rs. 1770
• TARGET 1: Rs. 1835
• TARGET 2: Rs. 1920
• TIME PERIOD: 15 - 30 Working days
• STOP LOSS: Rs. 1665

3. PRADEEP

• TRADE TYPE: BUY
• ENTRY PRICE RANGE: Rs. 83 - Rs. 85
• TARGET 1: Rs. 90
• TARGET 2: Rs. 95
• TIME PERIOD: 7 - 15 Working days
• STOP LOSS: Rs. 75

Note: V.L.A. Ambala emphasizes that these recommendations are based on price movement, past behaviour, and technical analysis.

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.