Day trading guide for Wednesday: 6 stocks to buy or sell today — 21th September

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Day trading guide for Wednesday: After showing a sustainable upside bounce from the lower support levels on Monday, Indian stock market witnessed upside move with high volatility on Tuesday and closed the day higher on second straight session. NSE Nifty closed 194 points higher at 17,816, BSE Sensex gained 578 points and closed at 59,719 whereas Bank Nifty finished 563 points higher at 41,468 levels. All indices ended on the positive side in Tuesday’s session with pharma, healthcare and consumer durable leading the race.

According to stock market experts, strong global cues and steady foreign flows are helping Indian markets outperform its emerging market and Asian peers. They said that a small positive candle was formed on the daily chart with gap up opening and with long upper shadow. Technically this signal presence of strong overhead resistance around 17,900 to 18,000 levels. The chart pattern could also indicate weak upside bounce in the last two sessions compared to recent weakness from the highs. They went on to add that after the formation of higher bottom on Monday at 17,429 levels on Monday, the current swing high of 17,919 signaling a possible lower top formation, which needs to be confirmed with weakness in the subsequent session.

Stock market today: Technical outlook

Speaking on Nifty 50 technical outlook, Nagaraj Shetti, Technical Research Analyst, HDFC Securities said, “The upside bounce of the last two sessions could be a relief rally after a sharp weakness from the highs. If Nifty fails to move above 17,920 levels in the short term, then one may expect beginning another round of weakness from the highs towards 17,450 levels. On the move above the said hurdle, the market could encounter the next resistance of around 18,100 levels.”

“If we look at the short term charts, the recent correction in the Nifty has led to a breakdown from a ‘Rising Wedge’ pattern on the daily chart and the momentum readings have given a negative crossover from the overbought zone. This has already turned the short term trend down and because of the oversold set-ups on the lower time frame chart, we have seen a pullback move in the last couple of trading sessions. Hence, the risk continues to remain high and until we do not surpass 18100 level, we are not out of the woods,” said Ruchit Jain, Lead Research at 5paisa.com.

Ruchit Jain of 5paisa.com went on to add, “In our Monday’s outlook, we had mentioned the probability of a buying interest in the defensive sector such as Pharma. We witnessed good momentum in certain stocks within this sector as expected and considering the higher volatility expectations ahead, this sector is likely to see some relative outperformance in the near term.”

Nifty call put option data

“Nifty Option chain for the weekly expiry reflects on PE writers adding highest exposure at 17000CE overall more than 1.5 lakh contracts (with highest fresh additions of more than 65 thousand contracts as well), followed by 17800PE- fresh additions of over 50 thousand contract. CE writers standing tall at 180000CE – over 1.2 lakh contracts, followed by 18200 strike- exposure of more than a lakh contracts as well. PCR OI at 17800 being comfortably above 1, is showing signs of strength for the index,” said Shilpa Rout – Derivatives Lead Analyst at Prabhudas Lilladher.

Nifty Bank call put option data

Shilpa Rout of Prabhudas Lilladher went on to add, “Bank Nifty Future Option chain reflects on PE writers being active at 41000 strike – overall above 65 thousand contracts, followed by 41500CE – highest fresh additions of more than 40 thousand contracts. CE writers active at 42000/43000 strikes – close to a lakh contract each.”

Buy or sell stocks for today

On stocks to buy or sell today, stock market experts — Sumeet Bagadia, Executive Director at Choice Broking; Mehul Kothari, AVP — Technical Research at Anand Rathi and Ravi Singh, Vice President & Head of Research at Share India — listed out these 6 shares.

Sumeet Bagadia’s stocks to buy today

1] Dr Reddy’s: Buy at CMP, target 4325 to 4400, stop loss 4100

2] Eicher Motors: Buy at CMP, target 3850, stop loss 3620

Mehul Kothari’s shares to buy today

3] IndiGo: Buy at 1905, target 1970, stop loss 1860

4] Bajaj Auto: Buy at 3770, target 3870, stop loss 3710

Ravi Singh’s stock picks for Wednesday

5] Metro Brands: Buy at 875, target 920, stop loss 855

6] Deepak Nitrite: Buy at 2175, target 2240, stop loss 2150.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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