Trade Call: 2 Technical Stock Picks By Sumeet Bagadia On Thursday, 25th Jan

On Wednesday, January 24, the Indian stock market ended the day higher. The Nifty 50 gained 1.01% at 21,453.95 marks, while the Sensex added 0.98% at 71,060.31 level. Hindalco Industries, Dr. Reddy's Laboratories, Tata Steel, IndusInd Bank, and HCL Technologies were the top Nifty gainers, while ICICI Bank, Axis Bank, Asian Paints, Adani Ports, and Hero Motocorp were the top losers. Among sectors, all sectors ended in green with the most gains seen in media, metal and oil & gas with more than 2% each. The BSE Midcap and Smallcap indices saw gains of around 2 per cent apiece on the broader market front.

Market Outlook

Amid extreme volatility in the opening trade, the Index advanced with a sharp recovery in the Banking stocks; however, higher levels did not last for long and another round of selling dragged the Index lower. Select heavyweight counters took the lead and helped the Index to recover from the lower levels, and in the last hour of trade, a sharp uptick across the board pushed the Index further higher to end the session at 21,453.95 with gains of 215.15 points.

All the sectors ended the day in green with Media and Metal being the top performers. Nifty50 has formed a piercing candlestick pattern which is bullish and as mentioned earlier, the Index has confirmed a reversal with a bullish cypher pattern coupled with a hidden bullish divergence in RSI. The immediate resistance is placed at 21,500 followed by 21,700 while the level of 21,200 will be considered as support, said Aditya Gaggar, Director of Progressive Shares.

Nifty Outlook

Rupak De, Senior Technical Analyst, LKP Securities said, "The Nifty exhibited volatility throughout the day following a weak start. On the hourly chart, the index began displaying initial signs of a reversal. However, it closed below the resistance level of 21500. A decisive move above 21500 could potentially trigger a significant rally in the index. On the downside, support is situated at 21400-21350. A confirmed breakthrough above 21500 may propel the index towards 21700 and beyond."

Bank Nifty Outlook

Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities stated, "After a brief downturn, the bulls made a strong comeback, successfully defending the crucial support level of 44,500, where fresh put writing activities were observed. Despite the rebound, the index is still navigating a downtrend. A potential pullback rally towards the 45,500 mark is anticipated. However, a significant development would be the index closing above 45,500, triggering further short-covering moves towards the 46,000 level, characterized by the highest open interest on the call side."

Stocks To Buy Today

On Thursday, January 25, Choice Broking's executive director Sumeet Bagadia suggested purchasing two stocks. Here is Puravankara Limited's and CEAT's technical analysis.

CEAT

Buy CEATLTD in Cash @ Rs 2876.15, stop-loss: Rs 2790, target: Rs 3330

In a promising market scenario, investors are advised to consider a strategic move by buying CEATLTD in cash at the current market price of 2876.15, with a stop-loss set at 2790 and a target price of 3330. CEATLTD has demonstrated significant strength and upward momentum in recent high-volume trading sessions, currently trading above 2870. The stock's recent consolidation within the 2450-2550 levels has set the stage for a potential upward movement, supported by a bullish candlestick pattern on the daily charts, showcasing a robust technical posture.

CEATLTD maintains a solid foundation, comfortably positioned above key Exponential Moving Averages (EMA) such as the 20-day, 50-day, and 200-day EMAs, confirming a positive trend. The Relative Strength Index (RSI), a crucial momentum indicator, is on the rise and currently stands at 71 levels, indicating a favourable market sentiment. The stock is poised to confront the next resistance level at 3330, and its ability to retain its position above critical support levels during pullbacks suggests a strong technical setup.

To manage potential risks, implementing trailing stop losses with a protective cushion near the important support level of 2790 is recommended, especially for investors who entered at lower levels. In conclusion, the technical analysis points to a positive outlook for CEATLTD, signalling the potential for higher movement and instilling confidence among investors. This strategic buy recommendation aligns with the observed bullish momentum and solid technical foundation of CEATLTD in the current market landscape.

Puravankara

Buy PURVA in cash @ Rs 246.15, stop-loss: Rs 239, target: Rs 256

Puravankara Limited (PURVA) is currently trading at 246 levels, showcasing a notable uptrend from the support levels around 215, in close proximity to its 20 Day Exponential Moving Average (EMA). The stock's positive momentum is further confirmed by its positioning above the short-term (20 Day), medium-term (50 Day), and long-term (200 Day) EMA levels, reinforcing its technical resilience.

A significant breakthrough above the resistance at 249, supported by robust volumes, underscores the stock's strength. A sustained closure above this resistance could potentially propel the stock to the next target of 256..
The momentum indicator, Relative Strength Index (RSI), is currently at 65 levels, indicating positive momentum in the stock Based on the above analysis we recommend buying PURVA in cash at CMP of 246.15 for the target of 256 with a stop loss of 239.

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.