The 30-share BSE Sensex opened lower by 79.41 points, or 0.11%, at the 72,696.72 level, while the Nifty 50 started off at the 22,112.90 level, up 8.90 points, or 0.04%.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated that the May pattern of continuous selling by FIIs and sustained buying by DIIs persists. So, in May, FIIs sold shares in the cash market for ₹29,474 crore, while DIIs purchased for ₹22,973 crore.
This trend is expected to continue, and the jump in the India VIX will assure extreme volatility. Under these conditions, the best alternative for investors is to wait and watch for a trend change, which might occur at any time. Clarity on election patterns is expected to emerge before June 4th, the counting day, and the market response may be substantial, explained Vijayakumar.
Domestic benchmark indices finished in the green for the second day in a row on Monday’ session, continuing on the bullish momentum from Friday’s session and favourable Wall Street cues.
According to experts, the Nifty 50 rebounded from intraday losses to end in the green for the second day in a row as the fourth round of the Lok Sabha elections started. At 15:00 IST on Monday, 52.6% of voters had turned out across ten states and union territories.
Market Review and Outlook – Ruchit Jain
Nifty 50 corrected in the initial hour of the trade and almost tested the 21,800 mark. However, we witnessed a gradual pullback move from the morning low, and it recovered the intraday losses and ended around the high of the day above 22,100, said Ruchit Jain, Lead Research Analyst at 5paisa.
The Nifty 50 has seen a sharp correction of almost 1,000 points in the last few trading sessions from the swing high. We had not seen any meaningful pullback, and hence, the RSI readings on the lower time frame were in the oversold zone. Also, the 100 DEMA support was placed around 21800–21850, and hence, the index witnessed a recovery from this support. It has also formed a ‘bullish hammer’ pattern on the daily chart, which is a positive sign if the price action shows positive momentum the next day. Hence, a move above Monday’s high could lead to positivity in the near term. The low of 21827, which coincides with the 100 DEMA, will be seen as an important support and should be seen as a key level for stop losses on long positions now. On a pullback move, the resistance will be seen around the 22,200–22,270 range, followed by 22,310. India VIX continued to rally higher and ended above the 20 mark. Thus, the volatility could continue to be high in the near term, explained Ruchit.
Share market tips today
Traders are advised to look for stock-specific buying opportunities but avoid aggressive positions, and one should keep yesterday’s low as a reference level for stoploss on long positions at the Nifty 50 level, advised Jain.
Stocks in focus today – Ruchit Jain
On stocks in focus on Tuesday, Ruchit Jain recommends buying two stocks: Britannia Industries Ltd and Hindalco Industries Ltd.
Britannia Industries Ltd
Ruchit stated that the stock went through a corrective phase in the first quarter of this calendar year, but the down moves were not backed by any high volumes. During last week, the prices gave a breakout above a falling channel trendline resistance, which was supported by good volumes. The RSI oscillator on the daily as well as the weekly time frame charts is indicating positive momentum, and hence, we expect the stock to rally higher in the near term.
“We advise traders to buy the stock in the range of ₹5,130–5,100 for a potential target of ₹5,500. The stoploss on long positions should be placed below ₹4,950,” said Jain.
Hindalco Industries Ltd
Jain explained that the stock has recently given a breakout above the previous swing high resistance. The volumes during the recent up move were good while have been low in corrections. The RSI is trading around support while the stock too has not breached its 40 DEMA support. Short Term traders can look for buying opportunities in the stock around ₹640 for potential targets around ₹690. The stop loss on long positions should be placed below ₹610.
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.
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Published: 14 May 2024, 10:00 AM IST