Stocks to buy: Sagar Doshi suggests BPCL, Power Grid Corp, SAIL shares to buy

Stock market today: The domestic benchmark indices entered a phase of consolidation on Wednesday following the recent rally spurred by the India-US agreement, with indices starting off flat yet showing slight gains as foreign inflows returned.

The Nifty 50 index commenced at 25,997.45, rising by 62.30 points or 0.24%. The BSE Sensex opened the day at 84,339.15, increasing by 65.23 points or 0.08%

Market analysts indicated that the overall trend remains positive even with the current range-bound fluctuations. In terms of institutional activity, domestic institutional investors (DIIs) recorded a net purchase of ₹1,174.21 crores on Tuesday, while foreign investors also noted a positive net investment of ₹69.45 crores, bolstering market sentiment.

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

Nifty 50

Nifty 50 ended +1% higher cumulative for the first 2 days of this week after its strong weekly closing observed on Friday, though it spent most of the session within a 150-point band in the past 2 days. Nifty 50 is seen as a buy in dip candidate for 25,940 / 26,130 while support can be trailed higher to 25,640 odd from 25,450. Nifty 50 is also forming a bullish (inverted) head and shoulder pattern on hourly charts over the past 1-month scale, with a neckline above 25,940.

Bank Nifty

Bank Nifty continued its outperformance against Nifty 50 as it had reversed from last week’s support below 59,700. Overall the index continues to head for 60,800 / 61,500 with support seen at 60,060 which can be trailed higher once Bank Nifty closes above 60,800.

Stocks To Buy on Wednesday

On stocks to buy on Wednesday, Sagar Doshi of Nuvama recommended three stocks - Bharat Petroleum Corporation Ltd (BPCL), Power Grid Corporation of India Ltd, and Steel Authority of India Ltd (SAIL).

BPCL (BUY): LCP: ₹386; SL: ₹370; TGT: ₹418

After witnessing higher ever weekly closing in the week passed by BPCL has been witnessing intraday buyers on an trades near 380 which can now be seen as an immediate support. Given the tailwind in PSE and OMC space, fresh all-time highs are expected to continue towards 420 / share on the same.

Power Grid Corporation of India (BUY): LCP: ₹294; SL: ₹282; TGT: 320

Large candle breakout seen on a 18 month falling trendline after the stock reversed from a 5 – year rising trendline support. Stock went ex-dividend earlier this week after crossing and sustaining above its 200 DMA. With prices now holding at 3 month high, Power Grid has more legs to this ongoing rally on the upside.

SAIL (BUY): LCP: ₹161; SL: ₹156; TGT: ₹174

SAIL had been rising in a upward moving channel for the past 55-60 odd weeks. The stock has now given a breakout above the highs of this channel which could allow a steeper rise from here on. Stock has also ended at a fresh 20 month high on daily and weekly charts. Given the tailwind from metal and steel as a sector, SAIL is likely to outperform other PSE names in the short term.

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.