Stock market today: Trade setup for Nifty 50 to Sensex, four stocks to buy or sell on Wednesday — August 21

Stock market today: The Indian stock market experienced strong buying, with the Nifty 50 and Sensex both closing up by half a percent, largely due to favorable global cues, on Tuesday. The Sensex ended the day up by 378 points, or 0.47%, reaching 80,802.86, while the Nifty 50 finished 126 points, or 0.51%, higher at 24,698.85.

Trade setup for Wednesday

On the outlook for Nifty, Osho Krishan, Senior Analyst - Technical & Derivatives, Angel One said, “Nifty is likely to encounter resistance around the subzone 24,800-24,850, after which another set of bearish gap is situated. On the downside, the pivotal zone 24,600-24,500 is anticipated to act as a support level for any short-term decline, followed by the 20-day EMA positioned around 24,400.”

On the Bank Nifty outlook, Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd., said, "The Bank Nifty also opened with a gap up and saw continuous buying interest. Consequently, the index ended the day on a positive note at 50,803. Technically, the Bank Nifty formed a green candle on the daily chart, indicating strength. The index registered a high of 51,026 and closed just above the barrier of the 21-DEMA (50,770), indicating further bullishness. Sustenance above 50,770 could push the index towards the 51,200-51,500 zone.”

Stocks to buy today

Regarding shares to buy today, stock market experts — Sumeet Bagadia, Executive Director at Choice Broking and Ganesh Dongre, Senior Manager of Technical Research at Anand Rathi — recommended five intraday stocks for today.

Sumeet Bagadia's stock recommendations today

1] Kotak Bank: Buy at ₹1,805.65, target ₹1,915, stop loss ₹1,750

KOTAKBANK is trading at 1805.65 and has recently broken out of a Descending Triangle pattern on the daily chart. The stock has formed a strong bullish candle, supported by increased trading volumes, indicating strength in the current trend. If the price sustains above ₹1,825 levels, it could potentially advance towards a target of ₹1,915. On the downside, immediate support is at ₹1,765.

The Relative Strength Index (RSI) is at 55.7 and trending upward, signalling increased buying momentum. Additionally, KOTAKBANK has surpassed its short-term (20-day), medium-term (50-day), and long-term (200-day) EMAs, reinforcing a bullish outlook.

In summary, based on the technical setup and indicators such as the RSI and moving averages, buying KOTAKBANK at ₹1,805.65 with a stop-loss at ₹1,750 and a target of ₹1,915 presents a compelling opportunity for potential gains.

2] Muthoot Finance: Buy at ₹1,875, target ₹2,030, stop loss ₹1,805

MUTHOOTFIN is currently experiencing a long-term uptrend, showing a bullish pattern with a consistent series of higher highs and higher lows on the daily chart. The stock is trading at ₹1,875.3 levels and is on the verge of breaking out of a consolidation range. MUTHOOTFIN has formed a strong bullish candle supported by notable trading volumes, indicating a continuation of the uptrend. MUTHOOTFIN recently bounced from its support zones, and if it maintains its position above the ₹1,900 level, it could likely continue its upward trajectory toward new highs.

The Relative Strength Index (RSI) is at 57.38 with a positive crossover, suggesting increasing buying momentum. Additionally, MUTHOOTFIN is trading above its key moving averages, including the short-term (20-day) EMA, medium-term (50-day) EMA, and long-term (200-day) EMA, which confirms the strength of the current uptrend.

Based on these technical indicators, we recommend taking a long position in MUTHOOTFIN at ₹1875.3. Set a stop loss at ₹1,805 to manage risk, and aim for a target price of ₹2,030, aligning with the current favourable market sentiment.

Ganesh Dongre's shares to buy today

3] United Spirits Ltd: Buy at ₹1,408, target ₹1,465, stop loss ₹1,370

In the recent short-term trend analysis of the stock, a notable bullish reversal pattern has emerged. This technical pattern suggests the possibility of a temporary retracement in the stock's price, potentially reaching around ₹1,465. At present, the stock is maintaining a crucial support level at ₹1,370. Given the current market price of around ₹1,408, a buying opportunity is emerging. This suggests that investors might consider purchasing the stock at its current price, anticipating a rise towards the identified target of ₹1465.

4] Tata Power: Buy at ₹422, target ₹438, stop loss ₹410

On the daily chart of this stock, a breakout at the ₹422 price level has been observed, signalling a potential upward trend. Complementing this breakout, the Relative Strength Index (RSI) is still turning up, indicating increasing buying momentum. Given these technical indicators, traders can consider buying on dips, entering the stock at a lower price point. To manage risk, a stop loss at ₹410 is recommended. The target price for this strategy is ₹438 in the upcoming weeks, suggesting a potential gain as the stock continues its upward trajectory.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.