The Indian stock market is expected to open on a steady note on Friday, following gains in global markets, amid a drop in crude oil prices.
In the previous session, the domestic equity benchmark indices ended flat, with the Nifty 50 closing above 23,250 level.
The Sensex eased 21.86 points, or 0.03%, to close at 74,314.59, while the Nifty 50 settled 53.00 points, or 0.23%, higher at 23,270.60.
Nifty 50 formed a small positive candle on the daily chart with upper shadow.
According to Nagaraj Shetti, AVP, Technical Research at HDFC Securities, this market action indicates minor bounce back in the last couple of sessions from near the key lower support of 23,100 – 23,000 levels (previous opening upside gap of 8th April and swing low of early part of June).
“The lack of strength to show sharp upside bounce from near the supports is visible in Nifty. The bearish chart pattern like lower highs and lows is also intact on the daily chart. On further upside, the Nifty could face strong hurdle around 23,400 – 23,500 levels,” said Shetti.
However, he believes any decisive slide below 23,000 could trigger next round of weakness in the market.
Stocks To Buy And Sell
Nagaraj Shetti has recommended two stocks to buy and sell today for short-term. He suggests trading in these stocks for a timeframe of 2-3 weeks.
The technical stock picks for today are Jio Financial Services and Premier Energies shares.
Jio Financial Services | Buy | Target Price: Rs 244 | Stop Loss: Rs 222
Jio Financial Services share price seems to be ending its 5-6 weeks of downward correction near the key supports around Rs 225 levels.
“Weekly 14 period RSI has reached its crucial lower area of 40-38 levels and is expected to bounce back from the lows. The recent failed breakdown of support around Rs 228-230 also indicates a chance of bounce back in the stock price in the near term,” said Shetti.
He recommends buying Jio Financial Services shares at Rs 229.60 for a target price of Rs 244 and maintaining a stop loss of Rs 222. The timeframe for this trade is 2-3 weeks.
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Premier Energies | Sell | Target Price: Rs 832 | Stop Loss: Rs 914
Premier Energies share price was in a sharp downtrend over the last few weeks, after forming a bearing rounding top pattern.
According to Shetti, formation of long bear candle on the weekly chart indicates a decisive breakdown in the stock price from the supports. Volume has started to expand during breakdown in the stock price and daily RSI shows negative indication.
He has a ‘Sell’ call on Premier Energies, with a target price of Rs 832 and a stop loss of Rs 914.
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