On Friday, the Indian stock market finished on a flat note. This was because of weak signals from around the world about the slowing economy. The Nifty 50 index got back its early morning losses and finished down 0.40 points at 17,624, while the BSE Sensex went up 22 points to 59,655 levels. But Bank Nifty couldn’t make up the ground it had lost and ended the day 151 points down at 42,118 levels.
Sumeet Bagadia, the Executive Director of Choice Broking, thinks that the 50-stock index Nifty has strong support at 17,500 to 17,550 levels, while it faces strong resistance at 17,800 levels. The technical expert went on to say that if either side of the Nifty index breaks, a bullish or bearish trend can be expected. Sumeet Bagadia told people on Monday to buy three stocks: ITC, Asian Paints, and Bata India. He did this by suggesting stock-specific ways to stay safe in these markets that are going nowhere.
Here’s everything you need to know to buy or sell stocks on Monday:
1] ITC: This top Indian conglomerate’s stock price has been going up for the past month and has now broken through a key resistance level at 392. This stock’s rise is a good sign, showing that it could go up even more. Also, using Fibonacci extensions from the swing low to the swing high shows that the stock could hit levels between 425 and 430, which is a 78.6% extension.
The Relative Strength Index (RSI) is currently at 73, which is thought to be “overbought” territory. But it has stayed at this level for a few weeks, which shows that the stock has strong momentum and could continue to rise in the short run.
Also, after a time of narrowing, the Bollinger Bands are now widening, which shows a rise in volatility and the possibility of more price changes. Overall, buyers might want to think about buying ITC at its current price of 408, with a stop loss at 394 to protect against possible losses.
2] Asian Paints: After a decent period of consolidation, the share price of Asian Paints has made a strong base around the 2800 zone on the daily chart. This shows that price action is strong. The price of a share of Asian Paints is higher than its 20-day and 50-day moving averages. The price has gone back up from the lower Bollinger band. A positive crossing in RSI and MACD also shows that people are likely to buy in the near future.
As soon as the price goes above 2900, which is 0.23 percent of Fibonacci retracement, it may go up even more. So, based on the above technical structure, one can start a long position at CMP 2885. But if you want to be on the safe side, the range between 2870 and 2865 would be a better place to start. If the market closes and stays above 2905, it will move towards 3060-3100 in the next few days. SL can be saved as ₹2800.
3] Bata India: At the moment, a share of Bata India is worth 1481 and has broken out of a stabilisation zone between 1380 and 1400. The stock has finally broken above its short-term moving averages of 20 and 50. This shows that the stock’s trend is changing.
RSI is still between 35 and 40, which is in the “highly oversold” zone on a weekly time frame. We think that the price will slowly go up from its current level.
On the Daily Chart, BATA was able to break out of a downward-sloping channel that had been a major barrier since December of last year. At this point, we can start to buy BATA with a goal of 1550 and a stop loss of 1440.