Buy or sell: Ruchit Jain of 5paisa recommends buying United Spirits and Wipro stock this week

Stock Market News: The domestic benchmark indices, the Sensex and Nifty 50, ended in green for the fifth straight session on Monday, led by gains in pharma, fast-moving consumer goods (FMCG), and consumer durable stocks. 

During Monday's session, the Nifty 50 touched a fresh all-time high of 22,186.65 before closing 81.55 points, or 0.37%, higher at 22,122.25. At 72,708.16, the Sensex ended at a gain of 281.52 points, or 0.39%.

Also Read: Stock market today: Nifty 50, Sensex rise for 5th straight day; ICICI Bank, RIL among top contributors

Market experts believe that traders' prevailing attitude was one of fear of missing out (FOMO), with value and bargain seeking being the favoured themes. Looking further, the US PPI inflation remained sticky and did not decline as fast as the market had predicted, but the Nifty 50 continued to rise.

“It’s really nice to see Nifty 50's remarkable ability to quickly bounce back from anything that points to the hawkish Federal Reserve backdrop. The biggest positive takeaway was that Bank Nifty is seen joining the conga line of rising sectoral indices on backdrop of improving asset quality and the government's continued focus on fiscal prudence,” said Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities.

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Also Read: Nifty 50 touches new all-time high, extends gain for 5th day in a row

On the broader market front, the Nifty Midcap 100 ended 0.36% higher, while the Nifty SmallCap 100 closed 0.40% higher. The fear gauge index, the India VIX rose by 5.22% on Monday.

"Despite an unattractive risk reward, the broader market continued its outperformance in expectation of improvements in private capex and optimism about political stability. Benign input costs and expectations of a pickup in rural demand will aid corporate earnings growth. 

On the global front, the US Fed will unveil its latest minutes this week, which may hint at the direction of rates; however, the higher US 10 yr yield and domestic outflows of FIIs are pointing cautiousness of foreign investors," said Vinod Nair, Head of Research, Geojit Financial Services.

Also Read: Oil prices remains stable due to ongoing Middle East conflicts, brent crude at $83.38/bbl

Stock Market Last Week

In the week gone by, our markets initially witnessed selling pressure and corrected up to 21,530 during mid-week. However, the indices rebounded smartly in the later part of the week, and it reclaimed the 22,000 mark at close, said Ruchit Jain, Lead Research Analyst at 5paisa.

Our markets have seen some roller coaster moves in the last one month, however, this volatility has been within a broad range where the index resisted twice around 22,127, and the declines from that support witnessed buying interest around the 40-day EMA. This seems to be a time-wise correction within an uptrend, as the broader markets too were overbought and have cooled off in this phase, according to Jain. 

Share Market Tips For This Week

The daily chart resembles an ‘Ascending Triangle’ on the daily chart of Nifty 50, and the breakout is placed above the recent high of 22,127. If this level gets surpassed, then the next target levels as per the measurement of this mentioned pattern will be seen around 22,500, followed by the 23,000–23,100 range. On the flip side, the immediate supports for Nifty 50 are placed around 21,925 and 21,800, while positional support is at the 40 DEMA level, which is now around 21,530, explained Ruchit Jain.

A lot of sectors/stocks have already shown signs of the resumption of the uptrend, where sectoral indices such as auto, IT, oil & gas, pharma, and Public Sector Undertakings (PSU) banks have already surpassed the previous swing high. In case of a continuation of this uptrend, stocks from these sectors could continue to outperform in the near term, said Jain.

Also Read: Global stocks flat as investors await earnings from heavyweights

Stocks To Buy This Week - Ruchit Jain

On stocks to buy this week, Ruchit Jain recommended two stocks - United Spirits Ltd and Wipro Ltd.

United Spirits Ltd

According to Jain, the stock has consolidated in a broad range in the last few weeks, which seemed to be a time-wise corrective phase. Prices have given a breakout above the previous highs at the end of last week, and the stock has thus resumed the uptrend. The RSI oscillator hints at positive momentum, and hence the stock could move higher in the near term.

 Short-term traders can look to buy the stock in the range of ₹1,510–1,500 for potential targets of ₹1,580 and ₹1,620. The stoploss on long positions should be placed below ₹1,440.

Wipro Ltd

Ruchit stated the stock has been forming a ‘Higher Top Higher Bottom’ structure and is thus in an uptrend. The volumes were good along with the price upmove during last week, and the RSI oscillator is hinting at positive momentum. 

Short-term traders can look for buying opportunities in the stock in the range of ₹545–540 for potential targets of ₹575 and ₹590. The stoploss on long positions should be placed below ₹513.

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 decisions.