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, Nifty 50 and Sensex, edged upwards on Thursday, boosted by state-owned firms and non-bank lender Bajaj Finance, although a decline in Tata Motors limited the gains. Following a flat opening, the Nifty 50 rose by 0.51% to reach 23,281.15 level as of 12:27 IST, while the Sensex increased by 0.35% to 76,801.15.

The expiration of January futures and options contracts is taking place today, which could lead to increased volatility as traders shift their positions to the following month. US stock markets ended lower overnight, and Asian markets exhibited a lack of movement on Thursday, following the US central bank’s decision to maintain its interest rates, which was anticipated.

The rise in US interest rates makes emerging markets like India less appealing to foreign investors, as indicated by reports. In January alone, foreign portfolio investors (FPIs) have sold off Indian equities worth $8.6 billion, positioning it for the second-highest monthly outflow recorded.

Dr. V K Vijayakumar, the Chief Investment Strategist at Geojit Financial Services, remarked that the market’s recovery is robust as it is being driven by reasonably priced large-cap stocks. The rally is likely to continue if the upcoming Budget introduces significant measures to stimulate growth, which would also enhance market sentiment.

Nonetheless, a consistent rally can occur only if foreign institutional investor selling halts and we start seeing some key indicators that signal growth and recovery in earnings. On a global scale, stock markets remain strong primarily due to the resilient performance of the US economy and the declining trend of interest rates in the US.

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

Nifty 50

Nifty 50 has been rising for last three trading sessions. From the recent swing low of 22,786, Nifty 50 has registered a pullback of more than 450 points. Nifty 50 has closed above 10 days SMA for the first time since 3 rd Jan 2025, which is the first sign of bullish trend reversal for the short term.

Nifty 50 is about to give negative monthly return for the fourth consecutive month, starting from October 2024. Historically, seasonality patterns show that the maximum number of consecutive monthly declines recorded has been four in the last twenty years, suggesting a strong possibility of a relief rally in the coming weeks and months.

Nifty 50 seems to be heading towards its 200 days EMA resistance of 23,600. On the downside 22,975-23,000 band likely to offer support below which down trend will resume.

Bank Nifty

After forming double bottom formation around 48,000, Bank Nifty index registered a nice pullback of more than 1,400 points in last four trading sessions. Index has also surpassed its 20 days SMA resistance placed at 49,075 level. On the week ended January 10, 2024, the Bank Nifty index broke below a bearish head and shoulders pattern by breaching the neckline support. This bearish pattern remains intact on the positional charts. To negate the bearish pattern, Bank Nifty index needs to surpass 49,900-50,000 zone decisively. On the downside 48,450-48,300 band is likely to act as a strong support for the index.

Technical Picks: Stocks to buy in the near-term

Technical Picks: Vinay Rajani of HDFC Securities recommends these two stocks in the near term – Bharat Petroleum Corporation Ltd (BPCL), and Kotak Mahindra Bank Ltd.

Buy BPCL ( ₹259.25) | Target ₹275 | Stop-loss ₹250

Stock price has formed bullish “hammer” candlestick pattern on the daily chart. Stock price has found support on 100-week EMA and bounced back. Brent crude prices have been falling, which can impact positively to all oil marketing companies. Daily RSI has turned oversold and pullback seems to be on cards in stock.

Buy Kotak Mahindra Bank ( ₹1,927): | Target ₹2,000 | Stop-loss ₹1,895

Stock is placed above all important moving averages, indicating bullish trend on all time frames. Stock has recently broken out from bullish “Flag” pattern on the daily chart. Indicators and oscillators like RSI and MACD have been showing strength in the current uptrend.

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.