City Union Bank to Moil - Vinay Rajani of HDFC Sec suggests these 3 stocks to buy in the near-term

Stock market today: The Indian stock market started on a positive note as major indices Nifty 50 and Sensex kicked off the trading day with gains, reflecting a favourable sentiment.

The Sensex rose by 0.66% or 537 points to reach 82,270, while the Nifty 50 climbed 0.62% or 154 points to hit 24,999.

The domestic benchmark indices rallied in early trading on Monday following reports that India has ascended to become the world's fourth-largest economy.

In addition, the early onset of the monsoon, the Reserve Bank's announcement of a record ₹2.69 lakh crore dividend to the government for FY25, and US President Donald Trump’s postponement of 50 percent EU tariffs to July 9 contributed to the market's optimistic outlook, as noted by experts.

As of 12:42 IST, the Nifty 50 rose 0.47% or 121.70 points at 24,975.70 level, and the Sensex increased 0.50% reaching 82,126.87 levels.

Vinay Rajani of HDFC Securities recommends ICICI Prudential Nifty India Consumption ETF, City Union Bank, and Moil shares in the short-term. Also, check out his views on the overall market.

Market Views - Vinay Rajani, Senior Technical and Derivative Analyst, HDFC Securities

Nifty 50

Last week, Nifty 50 found support on its 20 DEMA and bounced back. 20 days EMA is currently placed near 24,500 levels. Nifty 50 is currently placed above all key moving averages, indicating bullish trend on all time frames. Last week’s low and 20 days EMA are projecting strong support in the zone of 24,450-24,500 for the Nifty 50.

Nifty 50 is currently passing from the consolidation, which will be violated once Nifty 50 breaks out above 24,950 resistance. Above 24,950, Nifty 50 could head towards next resistance band of 25,200-25,300, derived from the 76.4% and 78.6% retracement of the entire fall seen from all time high of 26,277 to recent swing low of 21,743.

Bank-Nifty has been consolidating in the narrow range for last 5 weeks. Any level above 55,700 would confirm the fresh breakout on the upside. On the lower side band of 54,400-54,500 could offer support in the index.

Nifty Midcap index has found resistance on the downward sloping trend line, while Nifty Small-cap index has formed “Doji” candlestick pattern on the weekly charts. These developments show some sign of caution in the broader market. However, If these indices surpass the last week’s high then they would negate the possibility of bearish trend reversal.

Nifty PSU Bank index has broken out from the downward sloping trendline on the weekly chart. Weekly Ratio chart of PSU Banks vs Nifty 50 also confirms the potential outperformance from PSU banks.

Apart from PSU Banks, Metal Index is showing good strength on the chart and should perform well in the days to come.

Emerging and Asian market equity indices also have been in to narrow consolidation for last many sessions.

Dollar index has resumed its down trend, as it has showed bearish breakout from “Flag” pattern on the weekly chart. Falling dollar is usually augurs well for emerging markets and bullions.

Strategy

Primary trend is bullish but for the short-term consolidation is going on in the Nifty 50.

Traders should continue to hold on to the long positions with 24,450 stoploss in the Nifty 50. Any level above 24,950 will confirm the fresh bullish breakout. Above 24,950, we can expect Nifty 50 to extend the rise towards next resistance zone of 25,200-25,300.

Technical Picks: Stocks to buy in the near-term

Vinay Rajani of HDFC Securities recommends these three stocks in the near term - ICICI Prudential Nifty India Consumption ETF, City Union Bank, and Moil.

Buy ICICI Prudential Nifty India Consumption ETF(CONSUMIETF) (118.81) | Target ₹124.80, 128 | Stop-loss ₹114

Downward sloping trend line breakout on the weekly chart. Price has been sustaining above 200 DEMA resistance. Price is now placed above 20, 50 and 200 days EMA. Daily and weekly RSI has reached above 50, indicating sustainable up trend. Weekly MACD is now placed above signal and equilibrium line

Buy City Union Bank (195): | Target ₹218 | Stop-loss ₹186.80

Breakout from Symmetrical triangle pattern on the weekly chart. City Union Bank share price has been sustaining above 200 DEMA resistance. Stock price is now placed above 20, 50 and 200 days EMA. Monthly RSI has reached above 50, indicating sustainable up trend. Weekly MACD is now placed above signal and equilibrium line.

Buy MOIL (377): | Target Rs.403 | Stop-loss ₹352

Breakout from the long term consolidation. MOIL share price has been sustaining above 200 DEMA resistance. Stock price is now placed above 20, 50 and 200 days EMA. Daily RSI has reached above 50, indicating sustainable up trend. Daily MACD is now placed above signal and equilibrium line.

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.