BackDay trading guide for today: Six buy or sell stocks for Wednesday — May 17
According to analysts, Tuesday's profit booking attempt is an indication that the Nifty watch-out level would be 18,200-18,000 levels as a key support point for Wednesday. On theupside 18,473 is a hurdle to watch out on abullish note
PremiumIndian markets ended Tuesday's trade on a nervous note by breaking a two day winning streak owing to global blurry outlook on macro economic data due coming week. For the day, cautious investors prefer to book profits.
According to analysts, Tuesday's profit booking attempt is an indication that the Nifty watch out level would be 18,200-18,000 levels as a key support point for Wednesday. On upside 18,473 is a hurdle to watch out on bullish note.
Investors now look ahead to further talks between President Joe Biden and congressional leaders amid efforts to raise the US debt limit, as well as more Fed commentary and earnings reports due tonight. Despite FII being positive, analysts said it markets may see a neutral to negative trend Wednesday morning due to close watch on global macroeconomic data points.
The benchmark equity indices, the Sensex and the Nifty, declined on May 16. Despite starting the day strongly, the 30-share BSE Sensex dropped 413.24 points or 0.66% to close at 61,932.47. It dropped 498.3 points, or 0.79%, to 61,847.41 over the day.
The NSE Nifty finished at 18,286.50 after falling by 112.35 points or 0.61%.
For a straight fourteen days in a row, foreign institutional investors (FIIs) bought shares of Indian companies worth a whopping ₹1,406.86 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) sold shares worth ₹886.17 crore today.
The BSE midcap gauge and smallcap index both increased in the overall market by 0.18 and 0.12%, respectively.
The following indices saw declines: auto (-0.97%), financial services (-0.53%), consumer discretionary (-0.38%), bankex (-0.36%), and commodities (-0.34%).
Gainers included the industries of industrials, IT, telecommunication, capital goods, oil & gas, and power.
"Markets took a breather as profit-taking emerged as the key factor which dragged the Sensex below the psychological 62,000 mark. While strong FII buying and upbeat domestic economic readings had been aiding the rally over the past few weeks, global uncertainty over interest rate movement and slackening demand would prompt investors to book profit at regular intervals," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.
According to Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, Nifty opened higher but gradually drifted in negative territory to close with a loss of 112 points (-0.6%) at 18287. Except for PSU Bank and IT, all sectors ended in the red. After witnessing, a smart move in the last couple of days, the market is witnessing profit booking, especially in heavyweights from higher levels.
Global cues have remained mixed as US debt ceiling negotiations are ongoing, keeping investors cautious. On the domestic front, a healthy result season and consistent FII buying have been providing support to the market. The overall trend remains positive, however, some consolidation may not be ruled out given the sharp-up move in the last few weeks.
Here are key stocks to buy and sell in the trading session of Wednesday:
Sumeet Bagadia, Executive Director at Choice Broking:
- Buy Coal India with a stop loss of ₹235 for a target price of ₹245-248
- Buy Cholamandalam Investment and Finance Company Ltd with a stop loss of ₹1,000 for a target price of ₹1,040-1,050
Ganesh Dongre, Senior Manager - Technical Research at Anand Rathi:
- Buy Cipla at ₹920 with a stop loss of ₹905 for a target price of ₹945
- Buy State Bank Of India at ₹586 with a stop loss of ₹575 for a target price of ₹598
- Nifty Spot index to see support at 18000/18050, while resistance seen at 18500/18550
- Bank Nifty spot index to see support at 42500/42600 and resistance – 44300/44000
Anuj Gupta, Vice President - Research at IIFL Securities:
- Buy Coal India with a stop loss of ₹225 for a target price of ₹270
- Buy Bharat Petroleum Corporation Ltd with a stop loss of ₹347 for a target price of ₹398
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