Trading Guide: 2 Stock Picks By Sumeet Bagadia of Choice Broking On Thursday, 21st March

Wednesday's closing of the Indian stock market was broadly flat and was marked by a range bound session ahead of the Fed's decision. The Sensex saw a small rise of 90 points to close at 72,102, while the benchmark Nifty concluded flat at 21,839.10, or 0.099% higher. The Nifty Bank fell 74 points to close at 46,311 while the midcap index fell 6 points to end at 45,920, indicating pressure on the banking industry. Performance per sector was inconsistent with Nifty Oil & Gas emerging as the top gainer and the Metal sector closing in the negative due to selling pressure. The volatility indicator India VIX has dropped by 4.5% to close at 13.47 implying investors' rise in market confidence. Due to developments like the US Federal Reserve's declaration, which left benchmark interest rates unchanged at 5.25 to 5.50 per cent for the fifth consecutive meeting in accordance with street predictions and the publication of US existing home sales data later today, markets are predicted to stay in a consolidation phase.

Nifty Outlook

"Strong put writing (Bulls' entry) was observed at the 21,700 & 21,800 Strike which led to a sharp Intraday recovery in the second half. Nifty has now closed below the 50-Day Exponential Moving Average (DEMA) of 21,863 for the second consecutive day. The put writers (Bulls) lead the call writers (Bears) by a significant margin at the 21,800 Strike and the option activity at this strike will provide cues about Nifty's future direction," said Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities.

"From a technical perspective, Nifty formed a classic Doji pattern on the daily chart signalling a tug-of-war between the Bulls and Bears. In the hourly chart, the index continued to establish lower lows and lower highs. The Relative Strength Index (RSI) remained below the 50 level which indicates weakness in the current trend. The 50-day moving average (DMA) is now acting as a resistance level which is situated around 21,950 levels while technically, 22,050 is also a significant resistance point. The immediate support level for Nifty stands at 21,650," commented Om Mehra, Technical Analyst, SAMCO Securities.

Bank Nifty Outlook

"Bank Nifty fell sharply in the first half and recovered making an Intraday high of 46,656 before closing the day at 46,311, down 74 points. Bank Nifty has closed in red for 9 consecutive trading sessions. Heavy call writing was observed at the 46,500 Strike in the Index. The put writers (Bulls) further strengthened their positions at the 46,000 Strike and the option activity at this strike will provide cues about Bank Nifty's future direction," added Ashwin Ramani.

"Bank Nifty concluded the session at 46,310.90 with a marginal decline of 0.16%. This marked the Bank Nifty closing in red for the ninth consecutive session. An important support level for Bank Nifty remains at 45,660 and a breach of this level could lead to a break in the swing low, potentially indicating a shift towards further weakness. The Index has stronger resistance in the range of 46,800-47,000," stated Om Mehra.

Stocks To Buy Today

On Thursday, March 21, Sumeet Bagadia, Executive Director of Choice Broking, suggested a method of trading for shares of CG Power and Industrial Solutions as well as Chalet Hotels.

Chalet Hotels

Buy CHALET in cash @ Rs 794.40, SL: Rs 772, target: Rs 845

Trading at Rs 794.40, CHALET has recently shown a reversal after a period of slight profit booking. The stock has broken out above key levels at 700 and 760, along with a breakout of an inside bar candle, signalling a bullish setup for CHALET.

Additionally, CHALET is trading above key moving averages, including the 20-day, 50-day, 100-day, and 200-day moving averages. This indicates strong positive momentum and suggests the potential for further price increases. The Relative Strength Index (RSI) at 55 further confirms an upward trend and growing investor interest in the stock.
For investors looking to capitalize on this bullish momentum, buying CHALET in cash at the current market price of Rs 794.40 is recommended. To manage risk, consider setting a stop-loss (SL) at Rs 772. This SL level acts as a protective measure against potential losses in case the market moves unfavourably.

In summary, CHALET presents an attractive buying opportunity, with a target price of Rs 845. Investors should closely monitor the stock's price movement and consider implementing appropriate risk management strategies.

CG Power and Industrial Solutions

Buy CGPOWER in cash @ Rs 502.25, stop-loss @ Rs 488, target @ Rs 533

CGPOWER is exhibiting strong bullish momentum, currently trading at an all-time high of 517 levels. The recent breakout above the crucial resistance at 495 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, CGPOWER 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 69.36 levels.

For traders, keeping an eye on the strong support near 488 levels is advisable, as a breach of this level could signal a shift in sentiment. Overall, CGPOWER 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 CGPOWER and the CMP of 502.25 with a stop loss of 488 for the target of 533.

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.