Stocks in focus: Ruchit Jain of 5paisa recommends buying Aarti Industries, and Dalmia Bharat today

Stock Market News: The domestic benchmark indices, the Sensex and Nifty 50, were mostly unchanged at the opening bell on Tuesday. The indices were somewhat higher than their closing levels from the day before.

In early trade, the Sensex fell 113.63 points to 76,376.45, while the Nifty 50 dropped 29.6 points to 23,229.60.

On Monday, the market indices finished with a little decline after reaching all-time highs earlier in the day. The Sensex hit a record high of 77,079 points, while the Nifty 50 reached 23,411 points.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated that the mutual fund sector has been a solid pillar of support for this bull market, with consistent inflows. The ₹34,697 crore net inflows into equities funds in May, as well as monthly SIP inflows of ₹20,904 in May, show that domestic market support will continue despite FII selling. FIIs becoming buyers in the previous two days and closing their short positions will help the market in the short term.

Market Review and Outlook - Ruchit Jain

Nifty 50 registered a new record high to surpass 23,400 mark for the time, but it cooled-off from the highs during the last hour and ended the first day of the week around 23,250 with a marginal loss, said Ruchit Jain, Lead Research Analyst at 5paisa.

Our markets have seen a sharp V-shaped recovery from last week’s low and the index posted new record by surpassing last Monday’s high. However, some profit booking was seen at higher levels as the index has rallied sharply in last few days and the momentum readings on the lower time frame charts reached the overbought zone.

Thus, although the broader trend remains positive, some consolidation or pullback move cannot be ruled out to cool-off the overbought set ups. But any such corrections will be seen as a part of the uptrend as the daily and weekly readings are positive and hence, traders should use dips/consolidations to use as a buying opportunity. The support for Nifty 50 is placed in the range of 23,000-22,850. On the higher side, resistance is seen around 23,500 followed by 23,900, which is the retracement level of recent correction and the index would probably rally towards that level in the near term.

Stocks in focus today - Ruchit Jain

On stocks in focus on Tuesday, Ruchit Jain recommends buying two stocks - Aarti Industries Ltd, and Dalmia Bharat Ltd.

Aarti Industries Ltd

Ruchit stated that the stock went through a corrective phase in last one month, but has found a support base around the 200 EMA. The price has crossed above the short-term moving average while the RSI is also hinting at positive momentum.

We advise traders to buy the stock in the range of ₹660-650 for potential target of ₹740-750. The stoploss on long positions should be placed below ₹610.

Dalmia Bharat Ltd

Jain explained that the cement stocks have witnessed a positive momentum and this stock is on the verge of a breakout from a falling channel. Also, recently the RSI has formed a positive divergence with the price which is a positive sign.

Hence, we advise traders to buy the stock in the range of ₹1,870-1,860 and add on dips around ₹1,800 for potential target of ₹2,070. The stoploss on long positions should be placed below ₹1,740.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.