The Indian stock market benchmark indices, Sensex and Nifty 50, are likely to open lower on Friday tracking mixed cues from global markets. The trends on Gift Nifty also signal a negative start for the domestic equity indices.
In the previous session, the frontline indices consolidated and ended with minor gains, with the Nifty 50 closing near 25,300 level.
Nifty 50 formed a small bullish candle on the daily chart with upper and minor lower shadow.
“Technically, this high wave type candle formation echoes ongoing volatility in the market near the key overhead resistance of 25,400 levels. The present consolidation after two weeks of stellar rally indicates a lack of selling pressure despite placed near the key hurdle,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
He believes the ongoing consolidation/minor dip could be completed soon, and this is going to be a buying opportunity for the short term.
According to Shetti, a decisive move above 25,400, Nifty could open upside towards the next higher levels of 26,000 levels in the near term. Immediate support is placed at 25,000.
Stocks To Buy And Sell
Nagaraj Shetti has recommended two stocks to buy for short-term. He suggests trading in these stocks for a timeframe of 2-3 weeks. The technical stock picks for short-term are Canara Bank and Max Financial Services shares.
Canara Bank | Buy | Target Price: Rs 143 | Stop Loss: Rs 127
Canara Bank share price has witnessed an excellent breakout of down trendline resistance so far this week.
“We observe a formation of significant reversal pattern on the upside after forming a bottom reversal at Rs 115 levels-few weeks back. The upside breakout in the stock price was associated with rise in volume and daily 14 period RSI shows positive indication,” Shetti said.
He recommends buying Canara Bank shares for a target price of Rs 143 apiece, while maintaining a stop loss at Rs 127 level.
Max Financial Services | Buy | Target Price: Rs 1,470 | Stop Loss: Rs 1,310
After showing a sharp weakness in the month of October, the Max Financial Services stock price has witnessed sharp bounce back in this month after the formation of bottom at Rs 1,172. Bullish pattern like higher tops and bottoms is intact on the daily timeframe chart. Volume and RSI pattern shows positive outlook for the stock price ahead, Shetti added.
He has a ‘Buy' call on the Max Financial Services stock, with a target price of Rs 1,470 and stop loss of Rs 1,310.
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