Shares to buy or sell: Chandan Taparia recommends three stocks to buy today

Indian stock market indices, Sensex and Nifty 50, have been under heavy selling pressure, weighed down by escalating geopolitical tensions in the Middle East and the subsequent spike in crude oil prices, weak domestic corporate earnings, and persistent outflow of foreign funds from Indian equities.

The domestic equity market is expected to open lower on Friday amid mixed global market cues. The trends on Gift Nifty also indicate a gap-down start for the Indian benchmark index. The Gift Nifty was trading around 24,740 level, a discount of nearly 100 points from the Nifty futures’ previous close.

On Thursday, the Indian equity benchmark indices ended lower, with the Nifty 50 falling below 24,800 level. The Sensex declined 494.75 points, or 0.61%, to close at 81,006.61, while the Nifty 50 settled 221.45 points, or 0.89%, lower at 24,749.85.

Nifty 50 Outlook

“Nifty 50 Index opened positive above 25,000 mark but witnessed a steep sell off in the first hour. It was followed by the domino effect throughout the session and dropped by 300 points from its high. It gave a breakdown of the head and shoulder pattern on a daily frame and closed with losses of around 220 points. It formed a bearish candle on a daily frame and has been making lower lows from the last three sessions,” said Chandan Taparia, Head – Equity Derivatives and Technicals, Broking and Distribution, MOFSL.

According to him, till Nifty 50 holds below 24,850 zones, weakness could be seen towards 24,650 and 24,500 zones while hurdles are placed at 24,850 then 25,000 zones.

On option front, Maximum Call OI is at 25,000 then 26,000 strike while Maximum Put OI is at 23,500 then 24,000 strike. Call writing is seen at 25,000 then 26,000 strike while Put writing is seen at 23,500 then 24,800 strike, he noted.

“Option data suggest a broader trading range in between 24,300 to 25,300 zones while an immediate range between 24,500 to 25,000 levels,” Taparia said.

Bank Nifty Outlook

Bank Nifty index ended 512.25 points, or 0.99%, lower at 51,288.80 on Thursday, forming a bearish candlestick pattern on the daily charts.

“Bank Nifty formed a bearish candle on a daily scale and negated the formation of higher lows of the last four sessions. Index again got stuck in a wider range and now till it holds below 51,650 zones some weakness could be seen towards 51,000 then 50,500 levels while on the upside hurdle is seen at 51,500 then 51,750 zones,” Taparia said.

Chandan Taparia recommends three stocks to buy today, October 18. According to him, these stocks are technically well placed to see a decent upmove. The three stock picks by Taparia are HCL Technologies, National Aluminium Co., and Hindustan Petroleum Corporation Ltd.

Here are three stocks to buy today:

HCL Technologies | Buy | Target Price: ₹1,985 | Stop Loss: ₹1,815

HCL Technologies share price has broken out of the consolidation zone on the weekly chart which could take it to new life high territory. The RSI indicator is rising which confirms the upward momentum, Taparia said.

He recommends buying HCL Technologies stock for a target price of ₹1,985 apiece, keeping a stop loss at ₹1,815 level.

National Aluminium | Buy | Target Price: ₹245 | Stop Loss: ₹216

National Aluminium stock is on the verge of a breakout from a pennant pattern on the daily chart with large buying volumes to support the up move. The ADX indicator is rising which confirms the upward strength, he added.

Taparia recommends buying National Aluminium shares with a target of ₹245. Stop loss is recommended at ₹216 level.

HPCL | Buy | Target Price: ₹460 | Stop Loss: ₹420

According to Taparia, HPCL share price has bounced from major support levels with higher than average buying volumes indicating a bullish sentiment. The Stochastic Indicator has exited the oversold zone confirming bullish momentum.

He has a ‘buy’ call on HPCL shares with a target price of ₹460, and a stop loss at ₹420.

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.