Day trading guide for Monday: 5 stocks to buy or sell today — 22nd August

Day trading guide for Monday: Indian stock market snapped its eight day rally after sharp downside reversal on Friday. Nifty 50 index finished 198 points lower at 17,758 whereas BSE Sensex dipped 651 points and ended at 59,646 levels. Nifty Bank index lost 670 points lower at 38,985 mark. Mid-cap index fell 1.30 per cent, much more than key benchmark indices. Among sectors, power and capital goods indices rose the most, while realty, oil & gas, metals and bank indices fell the most.

According to stock market experts, a negative reversal type candle pattern was formed on the weekly chart that has resulted in a failure of upside breakout of the significant down trend line. This is not a good sign for bulls and one may expect further weakness in the short term.

Day trading guide for stock market today

"After showing a sharp upside move in the last few weeks, the Nifty has finally reversed down sharply on Friday and the short term chart pattern signal more weakness ahead. As per the indications of smaller to larger chart pattern, one may expect Nifty to slide down to 17300 levels (23.6% fibonacci retracement of June bottom to Friday's high) in the next 1-2 weeks. Immediate resistance for Nifty 50 index is placed around 17850 levels," said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

Unveiling day trading strategy for the week ahead, Ajit Mishra, Vice President - Research at Religare Broking said, "We believe the 17,300-17,600 zone would provide a cushion in Nifty next week while a rebound towards the 17,850-18,100 zone may attract profit-booking. It’s prudent to focus more on risk management as correction/consolidation in the index usually derails the momentum even in the top-performing sectors. For fresh positions, we suggest preferring less volatile stocks until the trend resumes."

"Bank Nifty is witnessing profit booking from the level of 39,750 however 38,800 is an immediate support level where we can expect a bounce-back while if it slips below 38800 level then 38,300-38,000 will be the next demand zone," said Santosh Meena, Head of Research at Swastika Investmart adding, "As per the option chain, 17,900-18,000 strike call options are holding the highest open interest which is acting as an immediate resistance area while 17500 will act as immediate support. FIIs' long exposure in index future stands at 48 per cent, which is neutral however PCR dipped to an oversold level of 0.88."

Advising day traders to take a cue from SGX Nifty moves, Anuj Gupta, Vice President — Research at IIFL Securities said, "Intraday traders may assume short range of SGX Nifty today in between 17,480 to 17,820 whereas broader range of SGX Nifty today is placed between 17,250 to 18,000 mark."

Anuj Gupta of IIFL Securities recommended ‘sell on rise’ strategy for today as market is trading in overbought zone.

Day trading stocks

Sharing intraday stocks for today, stock market experts — Mehul Kothari, AVP — Technical Research at Anand Rathi; Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher and Rajesh Bhosale, Technical Analyst at Angel One — recommended 5 stocks to buy today.

Mehul Kothari's intraday stocks for today

1] Tata Steel: Buy around ₹110, target ₹115, stop loss ₹105

2] Hindustan Aeronautics Ltd or HAL: Buy around ₹2243, ₹2300, stop loss ₹2200

Vaishali Parekh's stock of the day

3] Sterlite Tech: Buy around ₹161.50, target ₹172, stop loss ₹157

Rajesh Bhosale's stocks to buy today

4] Emami Ltd: Buy around ₹486.5, target ₹510, stop loss ₹470.80

5] Fortis Healthcare: Buy around ₹298.8, target ₹315, stop loss ₹288.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.