The Indian stock market is expected to open lower on Friday, following weak global market cues, as surging crude oil prices stoked inflation worries and fears of interest rate hikes by global central banks.
In the previous session, the benchmark indices Sensex and Nifty 50, rebounded after three days of sharp weakness, amid choppy movement and the lack of strength.
On Thursday, the Sensex gained 138.36 points, or 0.19%, to close at 74,902.59, while the Nifty 50 settled 46.30 points, or 0.20%, higher at 23,477.80.
Nifty 50 formed a small positive candle on the daily chart with lower shadow.
“Technically this market action indicates minor bounce back in Nifty 50 from the oversold region. The bearish lower highs and lower lows continued in Nifty on the daily chart and any further bounce from here could possibly form a new lower top around the hurdle of 23,625 levels,” said Nagaraj Shetti, AVP, Technical Research at HDFC Securities.
He believes further weakness from here could drag the Nifty 50 index down to the next crucial support of around 23,100 levels in the near term.
Stocks To Buy
Nagaraj Shetti has recommended two stocks to buy today for short-term. He suggests buying these stocks for a timeframe of 2-3 weeks.
The technical stock picks for today are Emmvee Photovoltaic Power and Electronics Mart India shares.
Emmvee Photovoltaic Power | Target Price: Rs 370 | Stop Loss: Rs 330
After showing a range bound action over the last 4-5 weeks, Emmvee Photovoltaic Power stock price has witnessed a sustainable breakout on Thursday. The stock price has surged higher from near the support of 10-week EMA. Larger bullish patterns like higher tops and bottoms is intact on the weekly chart, said Shetti.
He recommends buying Emmvee Photovoltaic Power shares at Rs 343.50, for a target price of Rs 370, while maintaining a stop loss at Rs 330 level. The timeframe for the trade is 2-3 weeks.
Electronics Mart India | Buy | Target Price: Rs 208 | Stop Loss: Rs 185
Electronics Mart India share price was moving up consistently as per bullish pattern like higher tops and bottoms over the last few months. The weekly candle of this week signals a formation of bullish rising three method type pattern, which is uptrend continuation pattern, Shetti said.
According to him, volume and daily/weekly RSI show positive indication for the stock price ahead.
He suggests buying Electronics Mart India shares at Rs 193.50, for a target price of Rs 208 and a stop loss of Rs 185.
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