The Indian stock market benchmark indices, Sensex and Nifty 50, are likely to remain cautious on Friday, tracking mixed cues from global peers, amid rising bond yields and elevated crude oil prices.
In the previous session, both the benchmark indices witnessed heavy selloff, declining 1.6% each, with the Nifty 50 slipping below 23,100 level.
Nifty 50 formed a long bear candle on the daily chart with gap down opening.
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According to Nagaraj Shetti, AVP, Technical Research at HDFC Securities, the recent swing high of 23,489 seems to be a new lower top and the Nifty 50 is now sliding down towards the formation of new lower bottom.
“The crucial support of around 23,100 levels (previous opening upside gap of 8th April and swing low of early June) has been tested again on Thursday and no significant recovery was made from the support. Hence, the market is now placed on the verge of breakdown,” said Shetti.
He believes the short-term trend of Nifty 50 has turned down sharply, and a decisive breakdown of 23,000 is likely to drag the index down to 22,600 in a quick period.
“Any bounce back from here could find strong resistance around 23,300 levels,” Shetti added.
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 Ola Electric Mobility and IndusInd Bank shares.
Ola Electric Mobility | Buy | Target Price: Rs 45.50 | Stop Loss: Rs 40
After witnessing a larger downward correction amidst range movement over the last 2-3 months, Ola Electric Mobility stock price has broken out sharply so far this week.
“We observe sharp breakout of down sloping trendline at Rs 40-41 levels on the weekly chart and the stock price is currently trading higher. Volume has expanded during upside breakout in the stock price and daily/weekly RSI shows positive indication,” said Shetti.
He recommends buying Ola Electric Mobility shares at Rs 42.10 level for a target price of Rs 45.50 and maintaining a stop loss at Rs 40. The timeframe for the trade is 2-3 weeks.
IndusInd Bank | Sell | Target Price: Rs 865 | Stop Loss: Rs 950
The bearish distribution type formation of the last couple of months has eventually broken decisively on the downside for the IndusInd Bank this week. The stock slides below the crucial lower support of 200-day EMA at Rs 935 and close lower. Volume has expanded during breakdown in the stock price and daily RSI shows negative indication.
Shetti suggests selling IndusInd Bank shares at Rs 919, for a target price of Rs 865, and keeping a stop loss of Rs 950 level.
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