Trade Call: 2 Technical Stock Picks With Buy Rating By Sumeet Bagadia On Friday, 5th Jan

On January 4, benchmark indices had a gain at the conclusion after two days of dips. The Nifty finished the day up by 141.30 points, or 0.66 per cent, at 21,658.60, whilst the Sensex closed up 490.97 points, or 0.69 per cent, at 71,847.57. Regarding the broader market, the BSE Midcap and Smallcap indices saw advances of 1.5% and 1.5%, respectively.

Regarding the sectoral front, every index ended the day higher than when it started, with the Power index seeing a 2 per cent gain while the Realty index was the best performer, rising as much as 6 per cent. Top Nifty gainers were Bajaj Finance, NTPC, ONGC, Tata Consumer, and IndusInd Bank; the top 5 worst performers included BPCL, LTIMindtree, Dr. Reddy's Laboratories, HCL Technologies, and Hero MotoCorp.

Market Outlook

"The market continued its upward march after the release of the Fed minutes yesterday which hinted at rate cuts starting this year. The fall of the India VIX over the past few trading sessions has cooled down the market as the market participants were unnerved by the unusually high level of the indices.

It was also evident by the substantial gap observed between the Nifty levels and its 50-day moving average (DMA). Nifty Bank recovered all the losses it made in the past two trading sessions. The resistance levels to watch out for in Nifty Bank are 48450 followed by 48600, beyond which Nifty Bank can once again see all-time high levels," said Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy.

Nifty Outlook

Rupak De, Senior Technical Analyst at LKP Securities said, "The Nifty's swift recovery following two bearish days indicates continued dominance by the bulls in the market. The present sentiment suggests a promising trajectory towards 21800-21850 for the Nifty. If it surpasses 21850, we might anticipate a further climb toward 22000. Notably, the index appears to have a short-term support level around 21500. A downward shift would likely initiate only if it falls below this mark; until then, it seems favorable for buyers to take advantage of market dips."

Bank Nifty Outlook

Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said, "The Bank Nifty witnessed a robust comeback by the bulls, decisively surpassing the hurdle at 48,000 on a closing basis. This breakthrough confirms the resumption of the uptrend, indicating a potential move towards the target of 50,000. The bullish crossover in the RSI further supports the positive momentum. In case of any pullback, the index has a solid support at 47,700, serving as a cushion for the"

Stocks To Buy Today

Choice Broking's executive director, Sumeet Bagadia, recommended buying two stocks on Friday, January 5, 2024. The entry price, stop loss, and target price for Tata Consumer Products and AU Small Finance Bank are listed here.

AU Small Finance Bank

Buy AUBANK in cash @ Rs 797, stop-loss: Rs 774, target: Rs 848

AUBANK is currently trading at Rs 797. The stock has recently formed an inverted head and shoulders breakout, accompanied by significant volume. There are expectations of further upward movement, potentially reaching Rs 848 levels. On the downside, substantial support is evident near Rs 774.

Furthermore, AUBANK 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 65, signaling an upward trajectory and confirming an increase in buying momentum.

Additionally, the Stochastic Relative Strength Index (Stoch RSI) exhibits a positive crossover. These technical indicators collectively support the notion that AUBANK may have the potential to achieve a target price of Rs 848 in the near term.

To manage risk effectively, it is advisable to set a stop-loss (SL) at Rs 774 to protect the investment in case of an unexpected market reversal. A prudent strategy involves considering buying opportunities on market dips at levels of Rs 784.

In summary, considering the technical analysis and prevailing market conditions, AUBANK appears to present a promising buying opportunity for those targeting an Rs 848 price objective, contingent upon the implementation of prudent risk management measures.

Tata Consumer Products

Buy TATACONSUM in cash @ Rs 1123, stop-loss: Rs 1085, target: Rs 1180

The analysis suggests a positive outlook for TataConsum based on the daily chart. The stock has shown a consistent higher high and higher low pattern over the past 10 days, with a recent breakout above the neckline indicating a potential upward movement. The increase in trading volume and the stock trading above the Volume Weighted Average Price (VWAP) for short term is 1091 further support a bullish scenario.

Additionally, TataConsum is trading above its 20-day, 50-day, and 200-day Exponential Moving Average (EMA) levels, reinforcing the bullish trend. Given these factors, the recommendation is to buy TataConsum in cash at the current market price (CMP) of 1123, targeting 1180, with a stop-loss at 1085.

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.