Stocks To Buy Before Budget: Day Trading Technical Picks By Sumeet Bagadia On Monday, 22nd July

Friday saw a rise in domestic benchmark indexes thanks to positive results from IT behemoths. The Nifty set a new record high of 24,854.80 as a consequence, but it later faced significant profit booking and ended the day down at 24,531 levels. The Nifty Midcap 100 and Nifty Small Cap 100, which represent the broader market indices, underperformed and ended the day lower than 2%. The Bank Nifty index saw a negative opening gap, continued to face pressure over the day, and ended the day at 52,266 levels. The market outlook for the week explores the key economic data releases and events such as Budget 2024 that may affect trading tactics and market mood.

Market Outlook

"In the week, significant economic data releases could influence market dynamics, starting with the US Q2 GDP Growth Rate on Thursday, July 25. The Q1 2024 GDP growth was revised down to 1.4%, but an improvement to 1.8% is expected for Q2, driven by strong retail sales, with the Atlanta Fed estimating an even higher growth rate of 2.5%. A strong GDP reading could delay anticipated rate cuts by the Fed. On Friday, July 26, the US Core PCE Inflation data will be released. In May, core PCE inflation remained at 2.6% year-on-year, with a modest monthly rise of 0.1%. June's expectations are for a 0.1% month-on-month increase in headline PCE, reducing the annual rate to 2.5%, and a 0.2% month-on-month rise in core PCE, maintaining the annual rate at 2.6%. These figures are critical for the Fed's policy decisions. Stay ahead of the game by closely monitoring these events and adjusting your strategies accordingly," said Alex Volkov, Market Analyst at VT Markets.

Nifty Prediction

The Nifty index has formed a shooting star candle on the weekly charts, suggesting a potential reversal from the recent upward trend after making an all-time high of 24854.80. The immediate support levels are 24,150 and then 23,750. A break below these levels could signal continued bearish momentum and potential further declines. On the upside, the resistance zone is between 24,850 and 24,900. The key indicator RSI starts declining from a level of 75, indicating that the index is moving out of the overbought territory and may be due for a correction or a pullback," said Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd.

Bank Nifty Prediction

"The immediate support levels are 51,800 and 51,100. A break below these levels could signal further downside momentum and potential declines. On the upside, the resistance zone is between 52,850 and 53,400. If the index breaks mentioned supports, consider adjusting strategies to sell or short the market. Conversely, if Bank Nifty remains above these support levels and heavyweight results are positive, it could lead to a breakout from the current range," commented Arvinder Singh Nanda.

Stocks To Buy Today

On Monday, July 22, Choice Broking's executive director Sumeet Bagadia recommended buying two stocks based on the research results of a technical analysis.

Godrej Consumer Products

Buy GODREJCP in cash @ Rs 1451.9, STOP-LOSS: Rs 1400, TARGET: 1525

GODREJCP is currently trading at Rs 1451.9. After a period of small falls and sideways consolidation, the stock has lately broken the neckline levels of Rs 1450 and is rising quickly on the upside with substantial volume. There are expectations of further upward movement, potentially reaching Rs 1525 levels. On the downside, substantial support is evident near Rs 1400.

Furthermore, GODREJCP is trading above key Exponential Moving Averages (EMAs), including the 20-day, 50-day, 100-day, and 200-day EMAs. This suggests a strong bullish momentum, indicating the potential for continued upward price action. The Relative Strength Index (RSI) stands at 61.07, signalling an upward trajectory and confirming an increase in buying momentum.

In summary, considering the technical analysis and prevailing market conditions, GODREJCP appears to present a promising buying opportunity for those targeting a Rs 1525 price objective, contingent upon the implementation of prudent risk management measures.

To manage risk effectively, it is advisable to set a stop-loss (SL) at Rs 1400 to protect the investment in case of an unexpected market reversal.

Power Mech Projects

Buy POWERMECH in cash @ Rs 6058.45, STOP-LOSS: Rs 5848, TARGET: Rs 6350

POWERMECH daily chart analysis offers a favourable view for the following week, indicating a steady higher advance. Notably, the stock has produced a notable higher high and higher low pattern, and the company's recent upward swing has effectively violated the neckline, establishing a new week high. This breakthrough indicates the possibility of a significant follow-through upward increase in the stock price.

Adding to the positive momentum, there has been an increase in trading volume, indicating growing market interest. The stock formed a strong momentum bias signifying a potential continuation of the uptrend following and the daily strength indicator RSI (14) is moving upwards and positioned above its reference line indicating a positive bias. Furthermore, POWERMECH is currently trading above its crucial 20-day, 50-day, and 100-day Exponential Moving Average (EMA) levels, reinforcing the bullish trend. Given the overall chart pattern, the analysis suggests a favourable long trading opportunity for investors.

Based on the above analysis we recommend buying POWERMECH in cash at CMP of 6058.45 for the target of 6350 with a stop loss of 5848.

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.