Stocks to buy: The Indian stock market benchmark indices, Sensex and Nifty 50 opened higher on Friday led by across the board gains, after witnessing five straight days of losses.
The Sensex gained 558.77, or 0.76%, to trade at 74,444.37, while the Nifty 50 was up 146.30 points, or 0.65%, at 22,634.95. Broader markets supported the upmove as the midcap and smallcap indices were trading over half a percent higehr each.
Rally was seen in Nifty Realty, Nifty Metals, Nifty Auto, Nifty Private Bank and Nifty PSU Bank indices, while Nifty IT was the only one to trade in the red.
“Nifty index formed a Bearish candle on daily scale and is forming lower highs from the last three sessions. Now till it holds below 22,500 zones weakness could be seen towards 22,350 then 22,222 zones whereas hurdles can be seen at 22600 then 22750 zones,” said Chandan Taparia, Head – Equity Derivatives and Technicals, Broking and Distribution, MOFSL.
Meanwhile, India VIX was at 24.18 levels. Volatility spiked above 26 levels during the week and has caused discomfort to the bulls. VIX needs to fall below 16-18 zones for stability and a smoother ride in the market.
Since it is beginning of new series option data is scattered at various strike price. On weekly front, Maximum Call OI is at 23,000 then 22,800 strike while Maximum Put OI is at 22,000 then 22,500 strike. Minor Call writing is seen at 22,500 then 22,600 strike while minor Put writing is seen at 22,400 then 22,200 strike. Option data suggests a broader trading range in between 21,800 to 23,100 zones while an immediate range between 22,100 to 22,800 levels.
“Bank Nifty Index formed a Bullish candle on daily scale and negated the formation of lower highs after three sessions. Now it has to continue to hold above 48,500 zones for a bounce towards 49,250 then 49,500 zones while a hold the same could see some weakness towards 48,250 then 48,000 levels,” Taparia added.
Chandan Taparia has recommended three stocks to buy today, May 31. According to him, these stocks are technically placed to see a decent upmove. These three stocks to buy today include, Bharti Airtel, Dixon Technologies and RVNL.
Bharti Airtel is in overall uptrend and holding gains at higher zones in spite of broader market weakness. It has retested breakout on daily chart and inched higher. It is forming higher highs from past six months and supports are gradually shifting higher.
Dixon is in overall uptrend and holding gains at higher zones. It has given consolidation breakout on daily scale and relatively outperforming within IT space. Momentum indicator RSI is positively placed which has bullish implications.
RVNL is having a dream run as stock has rallied by almost 1000% in past 2 years. Buying is visible across Rail PSU stocks with surge in delivery and trading volumes which is supporting the up move. On monthly scale it is trending upwards and holding gains at higher levels. It has given range breakout on weekly chart and trading at life highs which implies strength in the stock. On daily scale decline is being bought into as buying is visible on dips. Overall chart setup indicates that momentum is likely to continue and stock is all set to test 500+ levels. Momentum indicator RSI is positively placed on monthly and weekly scale which may support the ongoing up move. It is holding well above all crucial moving averages which has bullish implications.
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
