Shares to buy: Prashanth Tapse of Mehta Equities suggests these three stocks to buy in the short term

Stock market today: On Friday, the main domestic stock indices, Nifty 50 and Sensex, increased after a lackluster beginning, supported by appealing valuations in large-cap shares and renewed hope stemming from indications of reduced foreign selling.

The Nifty 50 was up 0.85% at 23,387.15, while the Sensex gained 0.89% to 77,026.82, as of 12:23 IST.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the recent market rally, which saw the Nifty 50 increase by 3.5%, occurred amidst growing trade tensions, with more to come when the reciprocal tariffs are implemented on April 2nd. The primary catalyst for this rally appears to be the buying activity from foreign institutional investors (FIIs) in the cash market over the last two days, coupled with a significant reduction in their short positions and an increase in long positions in the futures market. This trend seems to have instilled confidence in retail investors, who have started to purchase again in the broader market, evident in the notable recovery of the mid and small-cap indices.

A key characteristic of this rally is that the bulk of the gainers are associated with domestic consumption themes, which are likely to remain unaffected by the reciprocal tariffs. Investors may opt to observe the announcement regarding the reciprocal tariffs on April 2nd before determining their investment strategies.

Market Views - Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities

Nifty 50

Nifty 50 has successfully broken above the 50-period simple moving average and closed well above the trendline resistance, indicating strong bullish momentum. Technical indicators suggest a potential sharp upside move towards 23,500, as the momentum rally continues. A strict stop loss at 22,900 should be maintained for all existing long positions.

Bank Nifty

Bank Nifty has entered its 100-200 DMA resistance zone, which may lead to some profit booking at these levels. Given the recent rally in banking stocks, a healthy correction could be expected. Resistance is near 51,000, while key support levels are placed around 49,500 and 49,000.

Shares to buy for short term

Prashanth Tapse recommends buying these three stocks in the short term - Bajaj Auto, Canara Bank, and Ashok Leyland.

Bajaj Auto

Buy | Entry: ₹7,955 | SL: ₹7,800 | Target: ₹8,200

Bajaj Auto is holding strong above key support levels, with steady buying interest. The stock is consolidating, and RSI (14) is around 50-51, indicating neutral momentum with potential for an upward move. A breakout above 8,000 could push it towards 8,200. The auto sector remains positive, supporting further gains. A strict stop loss at 7,800 should be maintained to manage risk.

Canara Bank

Buy | Entry: ₹86.41 | SL: ₹84.00 | Target: ₹90.00

Canara Bank has built a strong base around 85, indicating stability at lower levels. If it moves past 88, it could gain momentum towards 90. The stock is showing signs of accumulation, and banking stocks continue to exhibit strength. Rising volumes support a bullish outlook in the near term. A stop loss at 84.00 is advised to control risk.

Ashok Leyland

Buy | Entry: ₹207.76 | SL: ₹202.00 | Target: ₹220.00

Ashok Leyland is trading in an uptrend with strong support around 205. The stock has shown resilience, and a move above 210 could attract further buying interest. With auto stocks seeing strong demand, it is well-positioned for further upside. RSI (14) at 48 indicates a healthy consolidation phase before a potential breakout. A stop loss at 202.00 should be maintained to protect against downside risks.

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 decision.