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Trade Setup | Things To Know Before Market Opening - 25 May 2023 Thursday
As concern over the US debt ceiling deadlock weighed on stock markets throughout the world, the domestic benchmark equity indices on Wednesday ended their three-day winning streak, dragged by heavyweight financials and metal companies, which witnessed profit booking during the session.
The Nifty 50 index ended down 0.34% at 18,285.40, while the benchmark S&P BSE Sensex slipped 0.34% to 61,773.78.
ICICI Bank Ltd and HDFC Bank Ltd were among the top Nifty 50 losers as financial stocks dropped 0.80%. Over 1.5% was lost by metal stocks, which had gained over the previous three days. Adani Enterprises Ltd., which accounts for 17% of the Nifty and dropped 6%, was the index's biggest loser. Over the previous three sessions, the stock had increased by 40%.
"Weakness in global markets dragged domestic indices down as the overhang of US debt ceiling negotiation influenced sentiments. Nifty opened lower and witnessed selling pressure throughout the session to close with a loss of 63 points at 18285 levels. Broader markets were mixed with Midcap 100 up 0.2% while small-cap 100 ended flat to negative. Most sectors ended in green with Pharma and Consumer Durables up 1% each.
Domestic markets have taken pause with Nifty facing minor resistance at a higher level of 18400-450 zones. However, the overall positive structure remains intact, with a view of buying on dips. Globally, investors would also take direction from the Fed meeting minutes to be released later today," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.
FIIs buy ₹1,186 crore worth equities on 24 May; DIIs pump in ₹301 crore
Life Insurance Corporation of India (LIC): The largest life insurer posted impressive growth in the bottom line for the fourth quarter of FY23. Consolidated Q4 FY23 PAT stood at ₹13,190.79 crore. rising by a breathtaking 447.47% or 5.5 folds year-on-year.
National Aluminum Company (NALCO): The company announced its Q4FY23 results on May 24, reporting a net profit of ₹459 crore, registering a decline of 51.7%, compared to ₹1025.46 crore in the corresponding period last year.
Trident Ltd: The company announced its Q4FY23 results on May 24, reporting a net profit of ₹129.7 crore, registering a decline of 28.4%, compared to ₹181 crore in the corresponding quarter last year.
Oil India: The company posted a nearly 9.70% jump year-on-year in standalone net profit to ₹1788.28 crore for the fourth quarter of FY23 as compared to ₹1630.01 crore a year-ago period.
Cummins India: The company on Wednesday said standalone net profit in the March quarter jumped 68.4% to ₹318.5 crore, crossing the ₹268 crore estimated in a Bloomberg analysts' poll.
Q4FY23 earnings to look out for: The list of some of the prominent companies who will release their Q4 results are as follows - Allied Digital Services Ltd, AIA Engineering Ltd, Anubhav Infrastructure Ltd, Aster DM Healthcare Ltd, Zee Learn Ltd, V2 Retail Ltd, Uniparts India Ltd, TTK Prestige Ltd, Balmer Lawrie & Co Ltd, Kolte-Patil Developer Ltd, Igarashi Motors India Ltd, Goodricke Group Ltd, and IL&FS Engineering and Construction Company Ltd.
Sumeet Bagadia, Executive Director at Choice Broking, recommends buying Coal India with a stop loss of ₹231 for a target price of ₹255 to 258.
According to Bagadia, the stock has a good support zone around 232-233 zone. A good bounce is often witnessed from 230 levels once respected. The price is quoting above its 50 EMA, which is a critical support zone as well as a strong buying opportunity if the price retests that level. The stock has also taken support at the middle Bollinger Bands, signaling that short-term support has been established.
"We forecast positive momentum in Coal India in the following weeks for the target price of ₹255 to ₹258, and stop loss can be kept as ₹231," added Bagadia.
Further, Sumeet also suggests buying JK Tyre in cash at ₹181 with a stop loss of ₹174 for a target price of ₹194.
According to him, the stock is currently trading at 181, exhibiting a favourable trading pattern as it surpasses the 50, 100, and 200-day exponential moving averages. This indicates a positive market sentiment and potential for further upward movement. The relative strength index (RSI) stands at 49, suggesting room for expansion and indicating a potential increase in buying activity.
The stock has formed a strong support base in the range of 174-176 levels, which adds to its overall stability. Considering the prevailing market conditions, our analysis suggests a promising outlook for JK Tyre in the upcoming days, with an anticipated movement towards the range of 194 to 197.
"However, it is important to note that our bullish views would be invalidated if the stock falls below the support level of 174. Therefore, investors should closely monitor the price action and reassess their positions accordingly to manage their risk effectively," advised Sumeet.
- Buy Tata Power with a stop loss of ₹199 for a target price of ₹220.
According to the analyst, the stock has a positive chart structure, and is in a higher top, higher bottom formation. For the last three consecutive days, the stock has ended positive.
- Buy Suzlon Energy with a stop loss of ₹8.80 for a target price of ₹12. The analyst notices a strong breakout with substantial volumes, and rising channel.
- Buy LIC Housing Finance at ₹375 with a stop loss of ₹360 for a target price of ₹390-400.
According to Shah, after posting its results, the stock of the stock has witnessed a correction, but no significant follow-up move was observed. Currently, the stock is holding a support level of 360, indicating the presence of active bulls in the market. On the smaller time frame, buying activity is visible, and there are signs of a breakout. If short covering occurs, it is expected to drive the stock to higher levels of 390 to 400.
- Buy Laurus Labs at ₹335 with a stop loss of ₹310 for a target price of ₹360-380.
The stock has experienced a breakout on the daily chart, accompanied by a sharp surge in trading volumes. This breakout indicates a significant change in the stock's price movement. The momentum indicator RSI has also generated a buy crossover, confirming the shift in momentum toward the upside. The stock has a lower-end support level at 310, providing a foundation for potential price movements. On the upside, the stock has potential targets at 360 and 380, suggesting possible further gains, believes Shah.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of PickStock. We advise investors to check with certified experts before taking any investment decisions.
Coal India Ltd
Punjab National Bank
Gujarat State Petronet Ltd