Stocks to buy or sell: Sagar Doshi of Nuvama recommends buying REC, Samvardhana Motherson, Ipca Lab today

Stock Market News: Wednesday saw the domestic benchmark indices, Sensex and Nifty 50, start the day with gains, as favourable assembly election results for the ruling party boosted investor confidence.

The Nifty 50 index saw an opening at 25,065.80 points, reflecting a gain of 52.65 points or 0.21%, while the Sensex index opened at 81,954.58 points, marking an increase of 319.77 points or 0.39%.

According to market experts, the Reserve Bank of India's (RBI) monetary policy announcement, scheduled for later in the day, is anticipated to be a significant event. However, the majority of investors are not expecting any changes in policy rates.

Dr. V K Vijayakumar, the Chief Investment Strategist at Geojit Financial Services, mentioned that the BJP's win in Haryana has provided a morale boost for the party and has increased confidence in the markets. If the MPC decides to shift the monetary stance from accommodative to neutral and sounds slightly dovish today, it will further enhance sentiments. Nonetheless, a rate cut is improbable as food inflation remains a concern.

Nifty 50 Outlook by Sagar Doshi, Senior Vice President- Research, Nuvama Professional Clients Group

Nifty 50 had an inside bar formation on daily charts wherein the index traded within its previous day’s range. With this Tuesday’s high and low now become important as a break of this levels are likely to direct the short term trend. A fresh support has been formed on the index at 24,750 for a bounce towards 25,300 – 25,350 on the upside. RBI Policy outcome and road for rates ahead are likely to set the tone for this week.

Bank Nifty

Bank Nifty as well had a similar inside day formation after witnessing a 4,000 pt correction in the past 6 trading days. Charts suggest that the ongoing bounce on Bank Nifty is likely to be short lived up to 51,800 . A confirm closing above 51,800 is required to further enhance the view on the buy side. For now, 50450 is likely to act as short term support for a bounce on the index towards 51,800 odd.

Stocks To Buy on Wednesday - Sagar Doshi

On stocks to buy on Wednesday, Sagar Doshi of Nuvama recommended three stocks - REC Ltd, Samvardhana Motherson International Ltd, Ipca Laboratories Ltd.

REC Ltd (BUY) : LCP : ₹524; Stop Loss : ₹498; Target Price : ₹590

For the first time in past 2 years REC had closed below its 200 DMA only on Monday only to gain back majority of it the following day. A strong negation of the break of 200 DMA was seen in Tuesday’s price action on REC. Intraday as well as daily chart pattern suggest that this buy is likely to continue with momentum likely to trigger short covering above 533 on the stock for targets 10-15% higher from CMP.

Samvardhana Motherson International Ltd (BUY): LCP : ₹203.81; Stop Loss : ₹195; Target Price: ₹225

On huge buying candle has been formed on daily charts at trendline support which has been in place for the past 5 months. With this the stock is expected to end its sideways consolidation which it has been facing for the past 3 months now. Stock has taken support from sub 200 odd levels and is likely to breakout further into new all time highs given that patterns suggest it to end its ongoing consolidation.

Ipca Laboratories Ltd (BUY): LCP : ₹1,537; Stop Loss : ₹1,465; Target Price : ₹1,750

Stock has been making fresh all time highs for the past 6 weeks now after it gave a breakout from a huge cup and handle pattern on weekly charts. With Tuesday’s move at record highs, a short term 10 day consolidation has also ended and stock could now march further higher to record highs ahead. Another 12-15% rally is likely to unfold on charts on Ipca Laboratories given the formation on weekly and daily charts aligning in similar trend.

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 decision.