Stock Market News: Domestic equity benchmark indices, the Sensex and Nifty 50, ended lower on Monday's session amid mixed global cues. Asian markets were dragged lower during today's session by diminishing hopes of an early US rate cut, and the benchmark indexes were impacted by a drop in financials that weighed on gains in oil-related companies and Tata Motors. The new week began quietly for the domestic stock indices. Before giving up gains in the last hour of trading, both indices rose by around 0.5% in the session.
Market experts claim that the Nifty 50 had volatile trading session on Monday as Fed Chair Jerome Powell wavered on the schedule of lower interest rates amid intensifying geopolitical concerns in the Middle East. Further, the Nifty 50 seemed vulnerable at higher levels, and one might blame it on the rise in US Treasury bond rates; the US dollar stood tall around its highest level since December 11; and China’s economic struggles failed to enhance the sentiment of Asian equity markets.
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Additionally, profit booking was the order of the day as experts estimate that the US Nonfarm Payrolls (NFP) for January increased to 353K from 333K in December, which was higher than predicted.
On Monday, the 30-share BSE Sensex ended lower by 354.21 points or 0.49% at 71,731.42 level while the Nifty 50 closed at 21,771.70 level, down 82.10 points or 0.38%.
Nifty 50 witnessed a positive start for the week, but it corrected in the later part of the day and ended below 21,800 with a loss of four-tenths of a percent. During last week, our markets witnessed an upmove to mark a new record high on Friday, but the index corrected and formed a ‘Shooting Star’ reversal pattern. This also coincides with a ‘Double Top’ as Friday’s high also resembles this, explained Ruchit Jain, Lead Research Analyst at 5paisa.
Now, the index has started this week with a break-down of the low of the star candle, and thus it confirms a trend reversal for the short term. Hence, traders are advised to stay cautious, as the index might go through a corrective phase going forward. In case such a scenario unfolds, we could see a correction first up to 21,600, followed by a move towards the 4 DEMA, which is placed around 21,370. Traders are advised to stay cautious and prefer profit booking on long positions. On the higher side, 21,950–22,000 will be seen as immediate resistance following last week’s high of 22,127, said Jain.
On stocks to buy or sell this week, Ruchit Jain recommended two stocks - Granules India Ltd and Bajaj Finance February Futures.
Here we list out full details in regard to Ruchit Jain's stock recommendations:
According to Jain, the stock has been forming a ‘Higher Top, Higher Bottom’ structure and is thus in an uptrend. The ’20 DEMA’ has been acting as a support, while the RSI oscillator has given a positive crossover, indicating positive momentum. Short-term traders can look to buy the stock in the range of ₹425–420 for potential targets around ₹445 and ₹460. The stop loss on long positions should be placed below ₹405.
The stock has been an underperformer in the recent uptrend, and the stock has now breached its important swing low support. The RSI oscillator is also hinting at negative momentum, and hence, we expect the down move to continue in the near term.
Traders are looking short on Bajaj Finance February Futures in the range of ₹6,660–6,670 for potential targets around ₹6,580 and ₹6,520. The stop loss on long positions should be placed above ₹6,840.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.ls
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