Stock market today: The domestic benchmark indices, Nifty 50 and Sensex, commenced trading on Wednesday with an upward trend as the US election voting continues, leading to increased volatility in global markets.
The Nifty 50 index rose by 95 points or 0.39%, starting at 24,308.75 points, while the Sensex increased by 295 points or 0.37%, beginning at 79,771.82 points.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, mentioned that the buzz and activity surrounding the US elections will persist for only a short period, after which the economic fundamentals will guide the market trend.
The significant market rebound observed yesterday suggests a pause in the declining trend that has been evident for several days. It is noteworthy that this rebound is being driven by fundamentally strong large banking stocks that are fairly valued, which indicates the potential for the trend to continue. Nevertheless, the weak earnings growth in Q2 and the earnings downgrades for FY 25 pose challenges that could limit the prospects for a sustained rally.
Nifty 50 has had an inside bar formation after closing at 4 month low at the start of this week. Leading indices had panic sold off on Monday only to post a smart recovery ahead of US election due overnight. With inside bar formation seen on daily charts, yesterday’s high and low now becomes important for the short term trend to take off with US election cues giving direction to global markets. Short covering is likely to extended above 24,300 on Nifty with a higher probability to play out while support is seen at Tuesday’s low of 23,850.
Bank Nifty continues to outperform Nifty 50 with the index forming an engulfing bullish formation on daily charts. With a macro view over the past 1 month on daily charts, the index has shown a higher low formation which shows early signs of a lift off rally above 52,600 for a 1,000-1,200 point move. Support on the index is seen at 51,850 on downside providing a decent risk to reward bet for longs from CMP.
On stocks to buy or Sell on Wednesday, Sagar Doshi of Nuvama recommended three stocks - Bank of Baroda, Bharat Forge Ltd, and Krishna Institute of Medical Sciences Ltd.
Ending a 100 day sideway correction, Bank of Baroda has finally reclaimed back above its 200 DMA as well as at a 3 month high. An index stock ending at 3 month high when the benchmark Bank Nifty is reversing signals early cues on smart money flows. Adding to this, Nifty PSU Bank index is also coming out of a correction breaking out from a sloping trendline along with a 2 month high closing. Another 5-7% follow up move could be seen on the stock.
After a 25% correction from its recent highs in the past 4.5 months Bharat Forge has seen some reversal signs reclaiming back above its 200 DMA. A clear lack of traction on the downside after breaking below its 200 DMA was seen. This reversal could allow a 50% breather rally for the whole correction seen in the past 2 quarters. This allows the target on charts to be seen between ₹1,620 -1,630.
Stock has formed a bullish flag breakout formation ending its 6 week correction. A smaller time frame cup and handle breakout is also seen to be on cards on hourly charts. The set up indicates further upside to newer lifetime highs on the same.
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.