Buy or sell: Vaishali Parekh recommends buying these stocks today - January 3

Stock Market News: Domestic benchmark equity indices Nifty 50 and Sensex ended in red on Tuesday's session dragged down by information technology (IT), financials, and auto stocks. The broader market also finished lower. Pharma, oil and gas, and metals stocks witnessed some buying.

The S&P BSE Sensex dropped 0.53% to 71,892.48 points, while the Nifty 50 fell 0.35% to 21,665.80 points.

On the macro front, the market's sentiment was impacted by fears about growing geopolitical tensions and a notable increase in the price of crude oil. Reports in the media state that Houthi militants backed by Iran attacked a Maersk container ship in the Red Sea, but US helicopters stopped them.

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Also Read: Stock market today: Sensex, Nifty 50 fall; geopolitical concerns, spike in crude oil prices weigh on sentiment

Ahead of the FOMC meeting minutes' release on Wednesday, investors also became more cautious. On Wednesday, India will release PMI data related to manufacturing. So, throughout the week, economic data points would serve as a guide for investors.

"The market extended yesterday’s last hour’s sell-off, taking negative cues from Asian peers due to weak Chinese manufacturing data and mounting tensions in the Red Sea, which has the potential to disrupt global trade and crude supplies. Ahead of the impending results season, investors are adopting a profit booking strategy. Auto stocks declined on below-expected volume numbers, while pharma stocks were the standout due to catch-up in the US economy," said Vinod Nair, Head of Research at Geojit Financial Services.

In the midst of a wave of profit-taking on the second trading day of 2024, Nifty 50 and Bank Nifty witnessed nervousness, according to Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities. The COVID-19 subvariant JN1 cases that have surged across India have been the biggest negative catalyst.

"Strictly speaking, if last two days trading action at Dalal Street be described with one word, that would be "volatility". Well, this should not come as any surprise amidst overbought technical conditions. Interestingly, Nifty Bulls have panicked after Nifty scaled new all-time-high at 21,834.35 mark in yesterday’s trade," added Tapse.

Also Read: Outlook 2024: From capex cycle to PLI boost, here are the 6 key themes for Indian markets in 2024

Day trade guide by Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher for Wednesday's session:

Parekh said Nifty 50 witnessed some profit booking after resisting near the 21,800 zone since the last 3 sessions and slipped down to some extent to take support near the 21,550 levels and with a pullback seen ended near the 21,650 zone. The bias can turn little bit cautious once a decisive breach below 21,400 is confirmed with next major and crucial support zone maintained near 21,000 levels.

Bank Nifty witnessed some heavy profit booking slipping from 48,200 zone to end on a slightly weak note with major frontline banking stocks like ICICI Bank, Axis Bank and Kotak Bank losing steam shedding some gains, according to Parekh.

"As mentioned earlier, the index needs to sustain above the crucial support zone of 46,300 levels to maintain the positive bias overall. The support for the day is seen at 21,500 zone while the resistance is seen at 21,800 level. BankNifty would have a daily range of 47,300–48,000 levels, " said Parekh.

Vaishali recommends buying the following stocks:

Buy Trident at ₹37.40 with a stoploss of ₹36.50 and a target price of ₹41.

Buy Rico Auto Industries at ₹89.55 with a stoploss of ₹88 and a target price of ₹95.

Nifty Spot Index

Support – 21,500/21,450

Resistance - 21,800/21,850

Bank Nifty Spot Index

Support – 47,300/47,250

Resistance – 48,000/48,050

Also Read: Outlook 2024: Oil to hover between $80-$90/barrel in 2024; OPEC+ to dictate trends, say experts

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.