Stock market today: Indian stock markets was trading in red on Monday due to concerns over valuations combined with disappointing earnings for the first quarter of the current financial year.
At 13:44 IST, Nifty 50 index was trading at 25,045 . 85, decreasing by 103.05 points or 0.41%, while the Sensex was at 82,130.57, falling by 356.54 points or 0.43%.
Analysts attribute the cautious opening to a combination of elevated valuations, underwhelming corporate performance, and global uncertainties.
On the technical front, according to Vinay Rajani from HDFC Securities, Nifty 50’s next crucial support is now seen near 25,000, 50-day Exponential Moving Average.
Rajani has recommended two stock to buy for short-term. Here’s what he expects from Indian stock market next week, along with his stock recommendations.
Market Views – Vinay Rajani, Senior Technical and Derivative Analyst, HDFC Securities
Nifty 50
Last week, the Nifty 50 lost 1.22% and closed below its 20 days SMA placed at 25,265. Nifty 50 has violated the support of its upward-sloping trendline, which connects previous swing highs of 25,116 and 25,222. The next crucial support is now seen near 25,000, 50-day Exponential Moving Average which also coincides with the lower trendline of a rising wedge pattern on the daily chart.
A decisive close below 25000 could trigger momentum selling, potentially dragging the Nifty 50 towards a positional support of 24,500. The recent swing high of 25,549 is not expected to act as strong resistance, and caution is advised unless this level is decisively breached. Bearish signals from indicators and oscillators like MACD and RSI on the daily chart further suggest potential weakness.
Bank Nifty
Similarly, Bank Nifty is also trading within a rising wedge pattern on its daily chart, with the lower trendline of the wedge placed at 56,600 in the spot market. A close below this level would signal a fresh breakdown, potentially pushing the index towards supports at 55,900 and 55,150.
Broader market indices also show signs of weakness; the NSE500 index has violated multiple trendlines and its 20-day DMA on a closing basis. Both Nifty Midcap100 and Smallcap100 indices have confirmed a “Doji”; reversal pattern after a prolonged uptrend on their weekly charts, with a subsequent bear candle reinforcing this bearish reversal.
On the global front, after a bullish breakout on positional charts, the MSCI Emerging Market index has formed a “Doji” candlestick, which could lead to a “throwback”; fall towards its previous breakout point. Conversely, the Dollar Index, after a prolonged downtrend, has formed a “Doji”; candle followed by a bullish candle on its weekly chart, signaling a potential bullish reversal.
Given the negative correlation between the Dollar and Emerging Market equities, this suggests a possible downward movement in emerging markets and an upward trajectory for the Dollar Index from current levels.
Nifty 50 Strategy : Short term Trend of Nifty 50 has turned weak. Recent swing high of 25,550 should be surpassed to negate the further downside. Momentum selling may emerge below the crucial support of 25,000 in Nifty 50, which could drag the index further towards positional support of 24,500.
Traders should cut longs and go short below 25,000 in Nifty 50 for the downside target of 24,500, keeping stoploss at 25,350.
Technical Picks: Stocks to buy in the near-term
Vinay Rajani of HDFC Securities recommends these two stocks in the near term – JSW Infrastructure Ltd, and Lodha Developers Ltd.
Buy JSW Infrastructure ( ₹319) | Target ₹350 | Stop-loss ₹304
JSW Infra share price has broken out from symmetrical triangle pattern on the weekly chart. Price rise was accompanied by jump in volumes. Stock price has been sustaining above 50 DEMA and 200 DEMA. Weekly RSI has reached above 50, indicating a sustainable up trend. Weekly MACD is now placed above signal and equilibrium line.
Buy Lodha ( ₹1,396): | Target ₹1,621 | Stop-loss ₹1,300
Lodha share price has broken out from the descending triangle pattern on the weekly chart. Stock is placed above key moving averages, indicating bullish trend on all time frames. Realty sector index has been outperforming for last couple of weeks. Monthly RSI has given bullish crossover, which indicates strength in the stocks. Volumes have risen along with the recent price rise. Stock has been forming higher tops and higher bottoms on the daily and weekly chart.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
