11 Jun Buy or Sell: 3 Stocks to Watch on This Week

Sumeet Bagadia’s Stock Picks: 3 Recommended Stocks

Last week, the Indian stock market experienced a second consecutive session of losses, influenced by weak US labor data and speculations regarding a possible pause in the US Federal Reserve’s interest rate hikes.

During the second week in a row, the stock markets continued to hover around key levels without breaking out. The Nifty50 index managed to stay above crucial support levels but struggled to surpass the important resistance zone.

The lack of a clear directional bias was evident as the index recorded a marginal gain of 29.30 points (+0.16%) for the week.

From a technical standpoint, two factors are contributing to the delay in the expected breakout.

Firstly, the market breadth has not shown significant strength, which is typically required for a substantial breakout and its subsequent sustainability. Secondly, the India VIX (volatility index) is at very low levels, similar to those seen before the pandemic. Such low levels of VIX make the market susceptible to volatile profit-taking activities at higher levels.

Both these factors need to be addressed for a significant breakout to occur. If a breakout were to happen in the current technical conditions, it could lead to a questionable rally in the markets. To learn more about stock market basics and stock analysis one can consider enrolling in our Stock Market Learning Courses, here.

It is important to remain cautious and monitor these factors closely as they could impact market dynamics and potential rally sustainability. Prudent risk management and a thorough analysis of market conditions are crucial for making informed investment decisions.

Last Week:

The market trend turned cautious as the Nifty closed below the 18,600 level during the Friday session.

The NSE Nifty corrected by 71 points, closing at 18,563 levels, while the BSE Sensex lost 223 points, closing at 62,625. The Bank Nifty index also declined by 6 points, finishing at 73,989 levels.

Despite this, the broad market indices closed relatively flat, outperforming the Nifty, although the advance-decline ratio fell to 0.86:1.

This prompted market experts to maintain a cautious stance, stating that the trend could weaken further if the Nifty fails to sustain above the 18,450 support level.

However, it is worth noting that the Nifty has strong support at 18,450 and faces resistance at 18,800 levels. Breaking through this resistance level on a closing basis could potentially pave the way for new highs in the market.

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This Week:

For the upcoming week, it is advisable to closely monitor the support and resistance levels of the Nifty.

The Nifty’s ability to sustain above the 18,450 support level will be crucial in determining the market’s direction. If the Nifty manages to hold above this level and breaches the resistance at 18,800, it could signal a potential upward move.

However, given the cautious trend and the recent market developments, it is important to consider risk management strategies and closely assess market sentiment and any global factors that may impact the Indian stock market.

Resistance and Support Levels:

The levels of 18,680 and 18,885 are expected to act as resistance for the markets, while support levels are likely to be seen at 18,480 and 18,365.

Technical Indicators:

The weekly Relative Strength Index (RSI) is at 62.18, indicating a neutral stance without showing any divergence against the price.

The weekly Moving Average Convergence Divergence (MACD) is bullish and remains above the signal line.

Sumeet Bagadia, Executive Director at Choice Broking, has recommended 3 stocks that he believes may provide significant returns in the upcoming week, as per mint article.

Related Read:This small-cap Tata group stock surged over 100% in one year

These stocks are:

Delta Corp:

 
Target Price – A close above Rs 250 has the potential to propel Delta Corp to a new 52-week high of Rs 262.

Stop Loss – Rs 233

The Technical

-Delta Corp’s share price is quoted at Rs 245, with a significant support level of around Rs 233.

-The stock is displaying strength, trading above key exponential moving averages (EMAs) of 20, 50, 100, and 200, indicating sustained strength in the stock.

-The RSI is at 67, further supporting the positive momentum.

Company Overview:

Delta Corp is a leading gaming and hospitality company in India.

It operates in various segments, including
-gaming
-hospitality,
-real estate, and
-online skill gaming.

The company owns and operates several casinos, luxury resorts, and hotels in popular tourist destinations such as Goa and Sikkim.

Delta Corp’s main focus is on the gaming industry, offering a wide range of casino games like poker, roulette, blackjack, and slot machines. The company has been at the forefront of developing the gaming and entertainment sector in India, capitalizing on the growing interest in recreational gaming activities.

Bharat Electronics Limited (BEL):

Target Price – Rs 129

Stop Loss – Rs 113

The Technical

–BEL’s share price is currently trading near Rs 120.35, which is the all-time high closing for the stock.

-The stock has formed a strong bullish candle on weekly charts and is trading above all key moving averages.

-The Bollinger band continues to expand on the daily chart, with the price trading above the upper line, indicating the stock’s strength.

-With a medium-term target price of Rs 129, purchasing BEL at the current price of Rs 120.35 is advised. It can also be accumulated near Rs 116 levels.

Company Overview:

Bharat Electronics Limited is a state-owned aerospace and defense company in India.

It is engaged in the design, development, manufacture, and supply of a diverse range of high-tech electronic products and systems for defense, security, and other industries.

BEL’s product portfolio includes
-radars,
-electronic warfare systems,
-communication equipment,
-missile systems,
-naval systems,
-electro-optics, and more.

The company caters to both domestic and international customers, and its products are used in various defense applications, including air defense, surveillance, and communication.

Samvardhana Motherson:

 
Target Price – Rs 90

Stop Loss – Rs 76

The Technical

-Samvardhana Motherson’s share is trading at Rs 81.75 levels, with a small resistance seen near Rs 82.55 levels.

-The stock has strong support near Rs 79 level, and it can be accumulated around this level.

-The Bollinger band has shown a squeeze on the daily chart, with the price trading above the middle band, further indicating strength.

Company Overview

Samvardhana Motherson is a global automotive component manufacturing company headquartered in India.

It specializes in designing and manufacturing high-quality components and systems for automobiles. The company operates through various subsidiaries and divisions, providing a wide range of solutions to leading automobile manufacturers worldwide.

Samvardhana Motherson’s product portfolio includes
-wiring harnesses,
-rearview mirrors,
-polymer components,
-bumpers,
-cockpit modules, and more.

The company’s products are essential for the functioning and safety of vehicles, and it has a strong presence in the automotive market, catering to both original equipment manufacturers (OEMs) and aftermarket customers.

As always, it is recommended to seek expert advice from a financial advisor or brokerage firm for personalized guidance based on their expertise and market analysis. Their insights can help you make informed investment decisions aligned with your goals and risk tolerance. Remember that investing in the stock market carries inherent risks, and past performance is not indicative of future results. Conduct thorough research and exercise prudence while making investment choices.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies are their own and not that of the website or its management. Aceink.com advises users to check with certified experts before taking any investment decisions.