Stocks in focus: Ruchit Jain of 5paisa recommends buying Larsen & Toubro and ICICI Prudential today

Stock Market News: The domestic benchmark indices, the Sensex and the Nifty 50, began Tuesday's trading session at all-time highs, with the Sensex surpassing 75,000 for the first time and the Nifty 50 topping 22,700.

At 9:15 IST, the S&P BSE Sensex was up 0.51% to 75,124.28, while the NSE Nifty 50 was up 0.44% to 22,765.10.

Gains in information technology, realty, and financial sectors drove indices higher, while positive corporate business reports further lifted market sentiment ahead of the earnings season.

The pattern of "higher highs and higher lows" is a clear positive indicator, according to Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, and it has been the most notable pattern in the Indian market this year. 

Consequently, investors have repeatedly found success with the purchase on dips approach. The market's new highs reached yesterday support the overall positive sentiment in the market. The largecaps' outperformance in yesterday's market action was a positive and healthy trend. This trend is likely to continue, added  Vijayakumar. 

Also Read: Sensex crosses 75,000 for the first time; Nifty 50 hits record high of above 22,700

The Sensex and the Nifty 50 finished Monday's trading session higher on upbeat global indications, declining crude oil prices, and a bounce in heavyweight Reliance Industries and auto stocks on expectations of robust quarterly profits.

The 30-share BSE Sensex reached a new closing peak of 74,742.50 after rising 494.28 points, or 0.67%. It rose 621.08 points, or 0.83%, during the day to hit 74,869.30, the record intraday high.

The NSE Nifty 50 came to 22,666.30, up 152.60 points, or 0.68%. It rose 183.6 points, or 0.81%, during the day to reach a lifetime high of 22,697.30.

Also Read: Sensex Today Live Updates: Sensex pares gains after opening above 75,000; Robust Q4 result expectations drive markets

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Market Review and Outlook - Ruchit Jain

The Nifty 50 started the week on a positive note and registered a new high, which indicates a continuation of the uptrend. Nifty 50 ended the day at 22,666 with gains of seven-tenths of a percent, led by heavyweights such as Reliance, L&T, and some stocks from private banking and auto names, said Ruchit Jain, Lead Research Analyst at 5paisa.

The Nifty 50 continues its ‘Higher Top, Higher Bottom’ formation, led by some index heavyweights and also supported by broader market participation. The index is trading at its all-time high, and usually retracements of previous corrections give us a fair idea of the next probable targets or resistances. As per this theory, the initial retracement will be seen in the range of 22,750–22,850, and hence this would be the crucial range to watch out for. If the index manages to surpass this zone, then one can expect 23,000 on the Nifty 50, which is around the 161.8 percent retracement level, explained Jain.

On the flipside, 22,500 and 22,360 will be seen as immediate supports on any pullback moves. Since there are no reversal signs yet, we continue with our advice to trade with a positive bias and look for buying opportunities, advised Ruchit. 

Also Read: Sensex, Nifty 50 hit fresh record highs; BSE mcap tops ₹400 lakh crore mark

Stocks in focus today - Ruchit Jain

On stocks to buy today, Ruchit Jain recommends two stocks - Larsen & Toubro Ltd and ICICI Prudential Life Insurance Company Ltd.

Larsen & Toubro Ltd (L&T)

Ruchit stated that this index heavyweight had recently given a breakout from a Cup and Handle pattern on the daily chart, which is a bullish pattern. The prices witnessed some pullback moves in last one week, but there were no volumes seen on price corrections while the volumes have been high along with the price upmoves. The RSI oscillator is hinting at positive momentum, and hence, we expect the uptrend to continue. Traders can look for buying opportunities in the stock in the range of ₹3,800–3,770 for potential targets of ₹4,000 and 4,100. The stoploss on long positions should be placed below ₹3,650.

Also Read: Nifty 50, Sensex today: What to expect from Indian stock market in trade on April 9

ICICI Prudential Life Insurance Company Ltd

Jain explained that the stock has recently formed a ‘Higher Top, Higher Bottom’ formation and has given a breakout from an ‘Inverted Head and Shoulders’ pattern on the weekly charts. The RSI oscillator is positive, and the price-volume action indicates a continuation of the uptrend. Traders can buy the stock in the range of ₹630–625 for a potential target of ₹590–600. The stoploss on long positions should be placed below ₹592.

Also Read: Indian stock market: 6 key things that changed for market overnight - Gift Nifty, US treasury yields to oil prices

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.