Stocks to buy: Sagar Doshi suggests Aadhar Housing, Bank of Baroda, NTPC shares to buy

Stock market today: The Indian stock market commenced on a sluggish note on Wednesday, prolonging its streak of losses and recording 12 consecutive months of negative returns. Both key indices opened lower as ongoing global and domestic challenges continued to impact investor confidence.

The Nifty 50 index began the day at 25,108.75, declining by 60.75 points or 0.24 percent, while the BSE Sensex fell by 184.45 points or 0.22 percent, starting the session at 81,917.65.

Market analysts pointed out that the positive momentum from the recent GST rate reductions has been overshadowed by escalating worries regarding the H1B visa issue, which is perceived as a hindrance to the improving trade relations between India and the US.

Nifty 50 Outlook by Sagar Doshi, Senior Vice President- Research, Nuvama Professional Clients Group

Nifty 50

One step back – two step forward are the counts Nifty 50 has been witnessing from the start of this month. The current cool-off is to be seen as a pullback and not a correction on the index. In yesterday’s weekly expiry session, Nifty 50 has closed higher than its previous day’s low, indicating a pause to the ongoing cool off trade. Targets on the upside continue to remain open for 25,600+ with support seen sub 24,900 mark.

Bank Nifty

Bank Nifty as outperformed Nifty 50 yesterday as an early sign before unfolding its move towards 56,400 odd levels. A good risk reward trade is seen for the index at 55,000 with half a percent SL to a 2.5% gain on the Bank Nifty. Bank Nifty is forming a potential bullish head and shoulder reversal pattern on daily charts with a neckline acting as momentum trigger above 55,850 odd.

Stocks To Buy on Wednesday

On stocks to buy on Wednesday, Sagar Doshi of Nuvama recommended three stocks - Aadhar Housing Finance Ltd, Bank of Baroda, and NTPC Ltd.

Aadhar Housing Finance Ltd (BUY): LCP: ₹535; SL: ₹520; TGT: ₹575

After NBFC's stealing the limelight, housing finance companies are now on traders radar as stocks are setting up patterns for a potential upmove. Aadhar Housing Finance share price has hit fresh all time highs this month and the momentum is likely to continue as the brief consolidation is seen ending in charts. Quick 6-8% move on the upside is likely to unfold.

Bank of Baroda (BUY): LCP: ₹253; SL: ₹246; TGT: ₹266

Given the massive breakout on Nifty PSU Bank index – components are now gearing up for a sizable up move in the coming weeks as well. Bank of Baroda has given a weekly trendline breakout earlier this month calling an end to its 15 month long corrective phase. Initial target for the same are seen at 266 while follow up targets can extend towards 285 in the medium term.

NTPC (BUY): LCP: ₹343; SL: ₹334; TGT: ₹365

Ending its 6 month corrective consolidation,. NTPC has given a bullish flag breakout on daily charts. Overall upside for the same is seen close 15-20% however we would advise to play for the initial leg of 365 in the first tranche.

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.