Stock Market News: Tuesday was the third consecutive day that the domestic stock indices, the Sensex and Nifty 50, finished lower due to profit-taking in capital goods, energy, and power stocks as well as nervousness around the election outcomes. India VIX spiked to 2-year high at 24.14.
Following a day of fluctuation between gains and losses, the 30-share BSE Sensex closed at 75,170.45, down 220.05 points, or 0.29%. It reached a peak of 75,585.40 and a low of 75,083.22 during the day. While the NSE Nifty started the day higher, it fell 44.30 points, or 0.19%, to end at 22,888.15.
Prashanth Tapse, Research Analyst and Senior Vice President of Research at Mehta Equities, stated that the Nifty 50 continued to decline for the third day in a row as caution was exercised ahead of six major events: the US PCE Inflation on May 31st, the May F&O expiry on May 30th, the US GDP on May 30th, India’s GDP on May 31st, and the May Auto Sales on June 1st. In the short term, volatility should be expected among these significant developments.
Nifty 50 Outlook by Sagar Doshi, Senior Vice President- Research, Nuvama Professional Clients Group
The Nifty 50 has ended flat for the third consecutive day after a big blowout rally seen on Thursday in last week’s trade. Market participants are staying cautious ahead of a general election outcome clubbed with a high VIX environment, as India VIX has gained over 100% in the past two fortnights. Overall, Nifty 50 has gained over 1,200 points from this month’s low and is managing to consolidate in the same range ahead of the big event outcome. Chart patterns suggest that the index is ready to scale towards 23,500+ unless a close below 22,700 is not seen.
Bank Nifty Outlook
Bank Nifty recouped nearly 90% of its losses, which were seen at the start of this month. With FII’s covering all of their index short position and turning net long ahead of the election outcome, participation in private banks is set to rise. With this, Bank Nifty’s outperformance is here to stay for this week’s trade, alongside an attempt to scale the bank to fresh all-time highs based on the daily chart pattern. Any dips below 49,000 are likely to act as fresh buying or adding zones for index longs.
Top Stock Recommendations by Sagar Doshi
On top stock recommendations for Wednesday, Sagar Doshi has recommended three stocks:
Indraprastha Gas Ltd (Buy): LCP: ₹472.70; Stop Loss: ₹455.00; Target Price: ₹512.00
According to Sagar, Indraprastha Gas has taken multiple support at its recent stance at the 200 DMA on daily charts, the chart is now ready to breakout above a sloping cup and handle formation. Momentum is likely to escalate once a close above 478 is seen. This breakout has a potential to gain at least 10% higher from CMP. Last 4 days of price action has ensured a strong base for the stock.
Sun TV Network Ltd (Buy): LCP: ₹660.70; Stop Loss: ₹634.00; Target Price: ₹711.00
According to Doshi, the stock has been moving in a higher top higher bottom formation for the past 2 months of trade. While Sun TV Network’s scrip has taken support at the 200 DMA 3 times in the past 1 month itself ensuring that the base is in place. Stock also recorded volumes at 9 month high in today’s trading session while this upswing is likely to extend further northwards of 700 mark as well.
HDFC Asset Management Company Ltd (HDFC AMC) (Buy): LCP: ₹4,011.60 ; Stop Loss: ₹3,790.00; Target Price: ₹4,450.00
Doshi stated that the stock has been able to conquer the selling zone of 3950-4000 from where it was facing profit taking for the past couple of months. In today’s session, the stock has also given a trendline pattern breakout at this higher range and hence a 8 to 10% follow up move in the direction of the breakout lies underneath. Momentum indicators also suggests that stock is ready for a fresh upswing.
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 decisions.
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Published: 29 May 2024, 09:15 AM IST
