Technical Picks: Vinay Rajani of HDFC Securities suggests these two stocks to buy in the near-term | Stock Market News

Stock market today: The domestic benchmark indices bounced back from a weak opening on Thursday, driven by optimism in IT stocks due to increased artificial intelligence (AI) spending in the US, although concerns regarding earnings slowdown and US tariffs limited the gains. As of 12:49 IST, the Nifty 50 rose by 0.41% to reach 23,249.60 points, while the Sensex increased by 0.35% to 76,672.48.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed out that there are two notable trends in the market that warrant attention. Firstly, institutional behavior is exhibiting a clear pattern – foreign institutional investors (FIIs) are consistently selling, while domestic institutional investors (DIIs) are consistently purchasing. Secondly, there is a noticeable shift towards quality, as large-cap stocks remain strong despite a weakening broader market. These two trends are expected to persist in the near future. Large-cap sectors such as financials, IT, and pharmaceuticals may continue to provide support to the market during declines.

Market Views – Vinay Rajani, Senior Technical and Derivative Analyst, HDFC Securities

Nifty 50

The Indian equity market benchmark index, the Nifty 50, has experienced a decline of 13% from its all-time high of 26,277. In contrast, the median decline for large-cap stocks is 22%, indicating that the index may be masking deeper issues beneath the surface. Many stocks have seen significant corrections from their recent peaks. Notably, this marks the fourth consecutive month of decline for the Nifty 50.

Historically, January has been a negative month based on the last 29 years of data. Interestingly, seasonality patterns show that the maximum number of consecutive monthly declines recorded has been four, suggesting a strong possibility of a relief rally in the coming weeks and months. The Nifty 50 has strong support in the zone of 22,650-22,800, which is derived from Fibonacci retracements and previous swing levels on the charts.

Bank Nifty

The Bank Nifty trend has become choppy recently, exhibiting significant volatility with sharp short- term movements. In the week ending January 10, 2024, the Bank Nifty index broke below a bearish head and shoulders pattern by breaching the neckline support of 49,700. This bearish pattern remains intact on the positional charts. The previous support level of 49,600-49,800 is anticipated to act as resistance for the index. Traders should consider the possibility of a pullback from current levels toward the mentioned resistance levels. It is advisable for those taking short-term long positions to protect their trading longs in index with a stop-loss of 48,000.

Technical Picks: Stocks to buy in the near-term

Technical Picks: Vinay Rajani of HDFC Securities recommends these two stocks in the near term – Indian Oil Corporation (IOC), and Indian Railway Catering & Tourism Corporation (IRCTC).

Buy IOC (129.50) | Target Rs. 142 | Stop-loss ₹121

Stock price has formed bullish “hammer” candlestick pattern on the weekly chart. Stock price has surpassed 5 and 10 DMA resistance. Indicators and oscillators have turned bullish on daily time frame. Recent fall in the brent crude price could help oil marketing company like IOC to see pullback rally from the current levels.

Buy IRCTC (789): | Target Rs. 860| Stop-loss ₹743

Stock price has formed bullish “Dragonfly Doji” candlestick pattern on the weekly chart, which indicates probable bullish trend reversal. Stock price has surpassed 5 and 10 DMA resistance. Indicators and oscillators have turned bullish on daily time frame.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.