Day Trading Insights for Today's Stock Market: Top Six Stocks for Trading on December 26th.
Today's Stock Market Picks for Day Trading: Experts Suggest Buying Eichermot, Rhim, BharatForge, Ibulhsgfin, Patanjali Food, and Lauras Lab.
"Positive Closure for Indian Stock Market Indices on December 22: Sensex and Nifty50 Experience Second Consecutive Session of Gains.
On Friday, December 22, the Indian stock market exhibited a positive trend as both the Sensex and Nifty50 closed in the green for the second consecutive session. The Sensex showed a positive momentum, surging by 242 points or 0.34%, settling at 71,106.96. Likewise, the Nifty 50 witnessed a notable increase, concluding 94 points or 0.44% higher at 21,349.40.
Reflecting on the market performance, Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd., commented on the positive momentum. He noted that the Nifty experienced a two-day gain following a sharp fall earlier in the week. The index closed with a 94-point increase at 21,349 levels. Most sectors closed in the green, with notable buying observed in IT, Realty, Metals, and Pharma.
Khemka attributed the positive market sentiment to the anticipation of an early interest rate cut by the US Federal Reserve in the coming year. This expectation led to a decline in the dollar and bond yields after the US reported weaker-than-expected Q3 GDP growth at 4.9%. Despite entering a holiday mood starting the weekend, Khemka expects the market to remain range-bound with specific stock actions in the upcoming week.
Today's Stock Market Day Trading Strategies.
Regarding the Nifty50, Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, remarked, "The Nifty index demonstrated volatile movements on the final day of the week but successfully concluded above the critical level of 21300. The lower-end support at 21200 offers a buying opportunity on potential dips to this level. Maintaining levels above 21300 could open doors for additional upward momentum, with a target set at 21500.
Discussing the outlook for Bank Nifty today, Shah mentioned, "The Bank Nifty index encountered selling pressure on the last day but managed to uphold the crucial support level of 47400. Failure to sustain above this support may lead to a potential decline toward the 47100 levels. On the positive side, the immediate resistance is at 47700, and a breakthrough above this level might instigate short-covering, propelling the index towards 48000/48200 levels.
Current State of the Stock Market.
In today's stock market outlook, the 'buy on dips' strategy remains a prominent approach for investors amidst a relatively subdued week. The spotlight is on mid and small-cap stocks, benefitting from the easing of oil prices and the expectation of a potential rate cut in CY24. This expectation is fueled by the slower-than-expected US GDP growth and weakness in the dollar, indicating early rate cuts. Noteworthy performances are observed in the Realty and Auto sectors, with PSU banks outperforming peers due to improvements in balance sheets and profitability. Despite premium valuations, the short-term positive trend persists, backed by a robust resurgence in Foreign Institutional Investors (FIIs) buying and specific stock actions. As we enter the festive season and approach year-end, a range-bound trade scenario with limited data points is anticipated.
Nifty Options: Call and Put Data Analysis.
Regarding the Nifty Call Put Option Data, Chinmay Barve, Head of Technical and Derivative Research at Profitmart Securities, stated, “Significant total Call open interest was observed at 21500 and 21600 strikes, totaling 164,321 and 111,832 contracts, respectively. The most notable Call open interest addition occurred at the 21500 strike, with an increase of 33,009 contracts in open interest," and further mentioned, “Substantial total Put open interest was identified at 21200 and 21000 strikes, totaling 123,489 and 199,091 contracts, respectively. The primary Put open interest addition was observed at the 21400 strike, contributing an increase of 52,416 contracts in open interest.
Analysis of Bank Nifty Options: Call and Put Data.
In the context of Bank Nifty Call Put Option Data, Barve further stated, “Substantial total Call open interest was observed at 48000 and 48500 strikes, totaling 194,895 and 131,954 contracts in open interest. The most notable Call open interest addition occurred at the 48200 strike, with an increase of 33,480 contracts in open interest," and added, “Prominent total Put open interest was identified at 47500 and 47000 strikes, totaling 123,691 and 141,354 contracts, respectively. The primary Put open interest addition was observed at the 47100 strike, contributing an increase of 12,222 contracts in open interest.
Today's Stock Picks for Day Trading.
On intraday stocks for today, stock market experts — Sumeet Bagadia, Executive Director at Choice Broking and Ganesh Dongre, Senior Manager — Technical Research at Anand Rathi and Kunal Kamble, Senior Technical Analyst at Bonanza Portfolio — recommended six stocks to buy today.
EICHERMOT: Purchase at ₹4006, Aim for ₹4185, Stop Loss at ₹3905
EICHERMOT, currently valued at ₹4006, has recently exhibited a reversal pattern, marking a significant turnaround supported by the emergence of a morning star candlestick at the bottom, accompanied by notable trading volume. The existing price indicates strong bullish momentum, with anticipations of a continuous upward trajectory towards the ₹4185 mark. Conversely, substantial support is noticeable near ₹3905.
Moreover, EICHERMOT is trading above crucial Exponential Moving Averages (EMAs), including the 20-day, 50-day, 100-day, and 200-day EMAs, signifying robust bullish momentum and suggesting potential further upward price movement. The Relative Strength Index (RSI) presently stands at 55.94, depicting an upward trend and indicating an increase in buying momentum.
In addition, the Stochastic Relative Strength Index (Stoch RSI) demonstrates a positive crossover. These technical indicators collectively propose that EICHERMOT holds the potential to reach a target price of ₹4185 in the short term.
To effectively manage risk, it is recommended to set a stop-loss (SL) at ₹3905 to protect the investment in case of an unexpected market reversal. A prudent approach would be to consider buying on dips at levels around ₹3950.
In summary, considering the technical analysis and the current market conditions, EICHERMOT presents a promising buying opportunity for those targeting a ₹4185 price objective, contingent upon the implementation of sound risk management strategies.
RHIM: Purchase at ₹808, Aim for ₹833, Stop Loss at ₹790
The daily chart analysis of RHIM presents an optimistic outlook for the upcoming week, indicating a sustained upward trajectory. Notably, the stock has formed a significant inverse head and shoulders pattern, and the recent upward movement has successfully breached the neckline, establishing a new 52-week high. This breakout implies the potential for a substantial and continued upward movement in the stock price.
Adding to the positive momentum, there is an increase in trading volume, reflecting growing market interest. The daily Relative Strength Index (RSI) supports this positive sentiment. Additionally, RHIM is presently trading above its critical 20-day, 50-day, and 200-day Exponential Moving Average (EMA) levels, reinforcing the bullish trend. Considering the overall chart pattern, the analysis suggests a favorable opportunity for long trading positions for investors.
Based on the above analysis, we recommend purchasing RHIM in cash at the Current Market Price (CMP) of 808 with a target of 833 and a stop loss at 790.
BharatForge: Purchase at ₹1203, Aim for ₹1220, Stop Loss at ₹1190
In the short-term trend, the stock exhibits a bullish reversal pattern, indicating a potential retracement towards 1220. With the support level holding steady at 1190, there is a likelihood of the stock rebounding towards the 1220 level in the short term. Traders may consider initiating a long position with a stop loss at 1190, targeting a price objective of 1220.
Ibulhsgfin: Purchase at ₹211, Aim for ₹218, Stop Loss at ₹206
On the short-term chart, the stock has displayed a bullish reversal pattern. Holding steady at the support level of 206, there is potential for this stock to rally towards the 218 level in the short term. Traders may consider taking a long position with a stop loss at 206, targeting a price objective of 218.
Patanjali Food: Purchase at ₹1610-1621.65, Aim for ₹1885, Stop Loss at ₹1490
A Classical Technical Rising Wedge Pattern is currently forming on the Daily time frame for Patanjali Food, offering a clear example of a short-term pattern. The security has found support from the Slow EMA (200), underscoring a robust support level, while both the Fast (50) and Slow EMA continue to trend upward, indicating an ongoing uptrend.
The surge in volume during positive price action suggests a strong interest from buyers at the current level. Additionally, the Relative Strength Index (RSI) is trading in a higher range, signaling an uptrend.
Given the technical setup outlined above, a long position may be considered with a target price (TP) set at 1885 and a stop loss (SL) at 1490.
Lauras Lab: Purchase at ₹410-414, Aim for ₹460, Stop Loss at ₹397
Lauras Lab has experienced a breakout of a Symmetric Pattern on the upside, signaling a positive move. Today's session witnessed a volume spike, confirming the emerging trend. The price is currently trading above both the Conversion and Base Line, further affirming the upward momentum. Given this technical setup, one may consider initiating a long position in Laurus Lab with a stop loss at 397 and a target price set at 460.
Disclaimer: The opinions and suggestions provided above belong to individual analysts or brokerage firms and do not represent the views of Mint. We recommend investors consult with certified experts before making any investment decisions.
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