Top three stocks to buy today: Expert Ankush Bajaj's picks for 20 May

Top 3 stocks recommended by Ankush Bajaj for 20 May

Buy: Tata Steel Ltd (TATASTEEL)

Current price: ₹157.55

Why it’s recommended: On the daily chart, the stock has given an upper channel breakout at the ₹154 level, which is a bullish signal. RSI is positioned positively, supporting the momentum. Since we have closed above this level, we are expecting a good upside rally and might also see ₹170+ levels soon.

Key metrics

Resistance level: ₹163-165 (short-term target zone)

Support level: ₹154 (pattern invalidation level)

Pattern: Upper channel breakout

RSI: Positive and strengthening

Technical analysis: The stock has broken out of a consolidation channel with its price trading above key levels. The breakout with confirmation from RSI supports a bullish outlook. Sustaining above ₹154 increases the probability of further upside.

Risk factors: Breakdown below ₹154 may invalidate the breakout. Global cues or weakness in the metals sector may impact the setup.

Buy at: ₹157.55

Target price: ₹163-165 in 4-5 days

Stop loss: ₹154

Buy: Central Depository Services (India) Ltd (CDSL)

Current price: ₹1,450

Why it’s recommended: The stock has closed above ₹1,400, which was an important resistance level based on the 38.2% Fibonacci retracement is drawn from the recent high of ₹1,993 to the recent low of ₹1,044. This breakout indicates bullish strength. On the daily chart, RSI is trading above 69, suggesting strong momentum, and the ADX is also on the bullish side, further confirming the positive trend.

Key metrics

Resistance level: ₹1,540-1,565 (target zone)

Support level: ₹1,400 (pattern invalidation level)

Pattern: Breakout above key retracement level

RSI: Above 69

ADX: Bullish

Technical analysis: The price has decisively crossed a key Fibonacci level with strength. Momentum indicators like RSI and ADX are aligned on the bullish side, indicating potential for a sharp move higher.

Risk factors: Breakdown below ₹1,400 could invalidate the setup. Broader market volatility or sector-specific news may impact short-term movement.

Buy at: ₹1,450

Target price: ₹1,540-1,565 in 4-5 days

Stop loss: ₹1,400

Buy: PI Industries Ltd (PIIND)

Current price: ₹3,759

Why it’s recommended: On the daily chart, the stock has given a breakout from a reverse head and shoulder pattern, which is a strong bullish reversal signal. RSI is trading above 62, indicating positive momentum, and MACD has given a fresh buy signal after a recent decline, adding confirmation to the bullish setup.

Key metrics

Resistance level: ₹3,850-3,870 (target zone)

Support level: ₹3,700 (pattern invalidation level)

Pattern: Reverse Head and Shoulder

RSI: Above 62

MACD: Buy signal

Technical analysis: The breakout from the reversal pattern, supported by momentum indicators like RSI and MACD suggests a bullish bias. Sustaining above the breakout level increases the probability of the target being achieved in the near term.

Risk factors: Breakdown below ₹3,700 may invalidate the pattern. Broader market weakness or sector rotation could impact the momentum.

Buy at: ₹3,759

Target price: ₹3,850-3,870 in 4-5 days

Stop loss: ₹3,700

Market Wrap: Nifty takes a breather after bullish run; market shows signs of consolidation

The benchmark Nifty 50 index ended 19 May (Monday) at 24,945.45, declining by 74.35 points or 0.30%. This slight pullback comes on the heels of a strong uptrend in recent weeks and signals that the market may be in the midst of a healthy consolidation phase before its next directional move. The BSE Sensex lost 271.17 points to close at 82,059.42, down by 0.33%.

The Bank Nifty remained nearly unchanged, posting a marginal gain of 65.80 points to settle at 55,420.70, highlighting lackluster activity in the banking and financial segments.

Sectoral snapshot: Broad-based caution with selective buoyancy

The overall sectoral performance on Monday echoed the market’s indecisiveness. Most sectors moved within a narrow band, reflecting a balanced, wait-and-watch sentiment among participants.

Realty emerged as a notable outperformer, advancing 2.026%. The sector found support from ongoing interest in infrastructure projects and reforms linked to energy and housing. Public sector banks also saw some traction, rising 1.46%, driven by investor rotation into housing finance and commercial banking stocks. Pharma stocks registered modest gains of 0.50%, aided by stable export demand and controlled raw material costs.

On the downside, the oil and gas sector declined 0.36% as traders booked profits following a recent rally. The service sector slipped 0.22%, weighed down by weakness in select pharma stocks. The fast-moving consumer goods (FMCG) sector fell 0.19%, reflecting subdued demand for consumer durables and everyday staples.

Top gainers and losers

Bajaj Auto Ltd zoomed ahead with a solid 4.34% gain, fueled by strong defense orders and increasing buzz around electric vehicles. Shriram Finance Ltd climbed 1.88% on the back of positive vibes in lending and a recovery in metal stocks. Power Grid Corporation of India Ltd followed with a 1.28% uptick, riding a robust order book and solid fourth-quarter results that kept investor sentiment upbeat.

On the flip side, Eternal Ltd lost 3.15% as traders locked in profits after a recent surge, Grasim Industries Ltd dropped 2.75% dragged by a sluggish IT sector and weak institutional flow, and Infosys Ltd fell 1.89% under pressure from muted banking cues and tech fund outflows.

Nifty technical analysis daily and hourly

After the recent rally, Nifty closed slightly lower at24,945.45 on 19 May, forming a small red candle on the daily chart. Despite the mild decline, the index continues to display strength and remains firmly positioned above the key support zone. The new support has now shifted higher to 24,875, while short-term resistance is seen around 25,100.

From a technical standpoint, Nifty is still trading comfortably above its key moving averages. On the daily chart, the 20-day EMA stands at 24,449 and the 40-day DEMA at 23,980—both well below the current price, indicating a continuation of the upward trend.

On the hourly chart, the index is hovering near the 20-hour moving average, which is placed at 24,961, while the 40-hour EMA is at 24,813. Price action near these levels suggests a possibility of short-term consolidation, but the overall trend remains bullish as long as 24,875 holds.

Momentum indicators reveal a mixed picture. On the daily chart, the MACD remains in positive territory and the RSI is holding above 63, reinforcing the bullish sentiment. However, on the hourly chart, the MACD has given a negative crossover and the RSI is below 55, indicating some loss of momentum in the short term.

Adding to the caution, fear gauge India VIX rose by 4.86% to 17.35, signaling increased volatility and the potential for sharper intraday moves. This uptick in volatility warrants a slightly more cautious approach in the very short term.

In conclusion, while the broader structure remains favourable and the uptrend is intact, traders should be mindful of short-term weakness reflected in hourly indicators and the rise in VIX. As long as 24,875 holds, the bullish outlook stays valid, and dips toward this level can be seen as buying opportunities, with the index likely to resume its upward journey toward 25,100.

 

Ankush Bajaj is a Sebi-registered research analyst. His registration number is INH000010441. Investments in securities are subject to market risks. Read all the related documents carefully before investing.

Registration granted by Sebi and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.