Buy or sell: Ruchit Jain recommends these two stocks to buy this week

Stock Market News: Domestic equity benchmark indices, the Nifty 50 and the Sensex, saw a positive close on Monday's trading session due to strong buying in Reliance Industries and Oil & Natural Gas Corporation Ltd (ONGC) as oil prices rose, as well as a comeback in beaten-down financials and a surge in Asian markets.

In addition, the market received positive clues from the surge in Asian markets, which was led by China after its market regulator declared it would completely halt lending restricted shares in an effort to stabilise its stock markets, according to a Reuters news report.

The S&P BSE Sensex rose 1.76% or 1,240.90 points to end at 71,941.57, while the Nifty 50 closed 1.8% or 385 points higher to end at 21,737.60.

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Also Read: Stock market today: Nifty 50, Sensex jump almost 2% each on all-round buying; investors earn ₹6 lakh crore

"The domestic market underwent an upturn as the recent selloff and positive Asian peers provided an opportunity to accumulate quality stocks. Despite premium valuations, confidence is upheld among investors due to the optimistic environment surrounding the interim budget and recent set of results aligning with forecasts. 

Globally, the upcoming FED policy stands out as a crucial factor. While a rate cut by the Federal Open Market Committee (FOMC) is unlikely, investors will eagerly monitor their commentary to get cues on future rate paths," said Vinod Nair, Head of Research, Geojit Financial Services.

Also Read: World markets today: US stocks muted ahead of Fed decision

Stock Market Overview

Our markets corrected in the truncated week gone by, where the pullback move witnessed selling pressure. The heavyweights from information technology (IT) and private sector banking dragged the benchmark lower, and the Nifty 50 ended around 21,350 with a loss of over a percent, said Ruchit Jain, Lead Research Analyst at 5paisa.

In the January series, Nifty 50 registered a new all-time high of 22,124 around mid of the month, but it corrected sharply in the last couple of weeks. The main reason for this correction has been the selling by the foreign institutional investors (FII's), who have sold equities worth over ₹33,000 crores in this month so far and have also formed short positions in the later part of the series. Technically, the index has formed a ‘Lower Top Lower Bottom’ structure, which has weakened the near-term trend. Although the longer-term trend still remains firm, this down move seems to be a correction within an uptrend. The index has ended above the ’40 DEMA’ support, which is in the range of 21,250–21,200. In the last three trading sessions, the index did break this during intraday, but it has managed to close above the same these days.

Thus, this would be seen as an important support zone for the coming week (on a closing basis). If this support remains intact, then an up move could be expected during the coming week as the RSI readings on the hourly charts are showing signs of a pullback from the oversold zone. In the case of such a move, 21,550–21,600 will be the initial range to watch, which will be the resistance. On the other hand, a break below 21,200 on a closing basis could drag the index lower towards the 21,000–20,900 range.

Also Read: Reliance Industries' market capitalisation crosses ₹19.5 lakh crore: How does it stack up against major global firms?

Share Market Tips For The Week

Traders are still advised to stay cautious from a trading perspective and look to lighten up longs on up moves. At the start of the new series, it will be important to see how new positions are formed in the derivatives segment, and thus, traders should be watchful of the data and trade accordingly.

Stocks To Buy This Week - Ruchit Jain

On stocks to buy this week, Ruchit Jain recommended two stocks - Hindustan Copper Ltd and Mahanagar Gas Ltd.

Here we list out full details in regard to Ruchit Jain's stock recommendations:

Hindustan Copper Ltd

According to Jain, the stock has been forming a ‘Higher Top Higher Bottom’ structure and is thus in an uptrend. Recently, the stock has seen some consolidation, which just seems to be a time-wise correction within an uptrend. The ’20 DEMA’ has been acting as a support, and hence, we expect the stock to resume its uptrend. Short-term traders can look to buy the stock in the range of ₹281-278 for potential targets around ₹305 and ₹320. The stop loss on long positions should be placed below ₹257.

Mahanagar Gas Ltd

Ruchit stated the stock has been outperforming in the recent corrective phase and the broader trend continues to be positive. The RSI oscillator is hinting at a continuation of the momentum and the volumes too are decent in this up move. Since there are no signs of reversal, traders are advised to look to but the stock in the range of ₹1,375-1,365 for potential targets around ₹1,480 and ₹1,575. The stop loss on long positions should be placed below ₹1,260.

Also Read: Oil settles at 2-month high on US macro data; Brent, WTI score biggest weekly gain since Israel-Hamas war

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.