Trade Call: 2 Technical Stock Picks By Sumeet Bagadia On Thursday, 14th March

The Indian stock market had a precipitous downturn on Wednesday, as the Sensex fell more than 900 points and the Nifty 50 was unable to hold above the critical 22,000 level. The Nifty lost 338 points to close at 21,998, while the Sensex ended the day down 906 points at 72,762. The Midcap Index had an abrupt drop of 2,115 points, wrapping up at 45,971, while the Nifty Bank also saw a significant decline, falling 301 points to 46,981. The market breadth showed an apparent bias towards shrinks, as seen by the advance-decline ratio of 1:23.

Nifty Outlook

"On the daily charts we can observe that the Nifty decisively breached the range 22200 - 22600 on the downside. Also, in the process has breached and closed below the 20-day moving average (22206). The daily momentum indicator had a negative crossover and today price has also confirmed the weakness. Thus, we change the short-term outlook to sideways and the range of consolidation is likely to be 21500 - 22300. As per the Elliott wave principle, we believe that the Nifty is forming wave D of an Ending Diagonal pattern. Below 21530, the assumption of wave d shall be negated. In terms of levels, 21910 - 21860 is the crucial support zone while 22200 - 22230 shall act as an immediate hurdle zone from short term perspective," Jatin Gedia - Technical Research Analyst at Sharekhan by BNP Paribas.

"Heavy call writing (Bear entry) was observed at all strikes from 22,000 until 22,500. This led to a sharp Intraday fall in the Index. Along with this, these strikes also saw put writers (Bulls) exiting. Whenever we see this happening together, the Intraday fall is usually sharp. The maximum put open interest (support) is placed at the 22,000 Strike and hence the option activity at this strike will provide cues about Nifty's Intraday direction ahead of the weekly expiry Thursday," said Mr. Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities.

Om Mehra, Technical Analyst, SAMCO Securities said, "Wednesday's session proved to be challenging for the Nifty. Despite of the positive Global market cues, investors resorted to across the board offloading of equities in the domestic market, leading to a significant decline of 1.51% in the index, that ultimately led the Nifty to close below Psychological-mark of 22K, at 21,997.70. The Nifty broke its rising trendline in the daily chart that accompanied by a large bearish engulfing candle. The breach of 22,000 level suggests that 21,800-21,700 now serve as immediate support levels. In the short term, it would be prudent to sell on rise unless 22,350 level is attained. The India VIX, a measure of market volatility, closed at 14.43 levels, marking a 7.9% surge on Wednesday. Long-term investors may consider adding exposure to Gold ETFs alongside blue-chip stocks with calculated risk."

Bank Nifty Outlook

"Bank Nifty held on to the 20-day average (46962) and managed to close above that. With participation coming in from Key heavyweights like ICICI Bank, HDFC Bank and Kotak bank we expect it to hold on to the support zone 46900 - 46700 and recover, said Jatin Gedia.

"Bank Nifty tanked 301 points to close at 46,981. Heavy call writing (Bear entry) was observed at strikes from 47,000 until 47,500. Bank Nifty has closed in red for the fourth consecutive day. The put writers (Bulls) managed to give a tough fight to the bears at the 47,000 Strike and the option activity at this strike will provide cues about Bank Nifty's future direction," stated Ashwin Ramani.

"The Bank Nifty fell 0.64%, ending at 46,981.30. PSU banking stocks were under significant pressure with intense sell-offs. The Bank Nifty is currently trading around the 50 SMA support level with further downside risk, if this support level is breached. The immediate support level remains at 46,000 level," added Om Mehra.

Stocks To Buy Today

Sumeet Bagadia, Executive Director of Choice Broking, suggested trading Timken India and Intellect Design Arena on March 14. View the comprehensive technical analysis, including entry and target prices as well as stop-loss levels, below.

Timken India

Buy TIMKEN in cash @ Rs 2574.10, stop-loss: Rs 2500, target: Rs 2740

TIMKEN, currently trading at Rs 2574.10, has shown signs of a potential reversal after a period of profit booking. The stock has held its ground and is now showing buying interest with good volume, indicating a positive sentiment among investors.

On the hourly chart, TIMKEN has closed above the 20 Exponential Moving Average (EMA), which is a bullish sign. Additionally, the Relative Strength Index (RSI) is below 28, indicating that the stock is in the oversold zone. This suggests that TIMKEN may be poised for a reversal and could potentially move higher from current levels.

For investors looking to capitalize on this potential reversal, buying TIMKEN in cash at the current market price of Rs 2574.10 is recommended. To manage risk effectively, setting a stop-loss (SL) at Rs 2500 is advisable. This SL level acts as a protective measure, safeguarding investments in case of an unexpected market downturn.

In summary, TIMKEN presents a promising buying opportunity, with a target price of Rs 2740. Investors should closely monitor the stock's price movement and implement appropriate risk management strategies to protect their investments.

Intellect Design Arena

Buy INTELLECT in cash @ Rs 1129.75, stop-loss @ Rs 1094, target @ Rs 1209

INTELLECT is exhibiting strong bullish momentum, currently trading at an all-time high of 1195 levels. The recent breakout above the crucial resistance at 1130 levels is a significant technical development, supported by robust trading volumes, reinforcing the strength in the stock. The breakthrough suggests a potential continuation of the upward trend, offering an optimistic outlook for investors.

Additionally, INTELLECT is trading above key moving averages, including the short-term (20 Day), medium-term (50 Day), and long-term (200 Day) EMAs, further affirming its bullish stance. The momentum indicator, Relative Strength Index (RSI), is at 69.53 levels.

For traders, keeping an eye on the strong support near 1094 levels is advisable, as a breach of this level could signal a shift in sentiment. Overall, INTELLECT current technical setup suggests a favourable environment for further upside potential, provided traders and investors remain vigilant to potential reversals and closely monitor key support and resistance levels.

Based on the above analysis we recommend buying INTELLECT and the CMP of 1129.75 with a stop loss of 1094 for the target of 1209.

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.