Stocks in focus: Ruchit Jain of 5paisa recommends buying Indian Hotels, and Cholamandalam Investment today

The 30-share BSE Sensex opened up by 194.90 points, or 0.26%, at the 75,585.40 level, while the Nifty 50 started off at the 22,977.15 level, up 44.70 points, or 0.19%.

Nifty 50 is predicted to continue its upward trajectory, said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, as per PTI news report. However, significant events like the GDP report, the exit poll findings, and the May F&O expiration might have an impact on the market. Forecasts for a good monsoon are probably going to help boost economic development and agricultural productivity.

Market Review and Outlook – Ruchit Jain

Our markets started the week on a positive note and the Nifty 50 rallied higher to surpass 23,100 level. However, we witnessed some profit booking during the end of the session and Nifty 50 gave up all the gains to end below 2,2950 with a marginal loss, said Ruchit Jain, Lead Research Analyst at 5paisa.

Nifty 50 resisted around the rising trendline hurdle and witnessed some profit booking towards the end. The banking space continued to outperform and is catching up for the recent underperformance. India VIX rallied higher and tested 26 level during the day, which is expected to remain high till the outcome of the election results.

While the daily RSI remains positive, the oscillator on the lower time frame chart has shown signs of pullback from the overbought zone. Such situations usually indicate correction within an uptrend. However, there are signs of reversal of the trend yet, it’s just that the volatility could remain high due to the event, explained Ruchit.

Share market tips today

Hence, traders are advised to keep a buy on dip approach and enter longs near supports so that risk reward becomes favourable. The immediate support for Nifty 50 is placed in the range of 22,800-22,750 followed by strong support around 22,600. Any dips towards the supports could be used to form long positions. On the higher side, the trendline resistance for Nifty 50 is seen around 22,100 which if surpassed, then it has potential to rally towards 22,450-22,500 in the short term.

Stocks in focus today – Ruchit Jain

On stocks in focus on Tuesday, Ruchit Jain recommends buying two stocks: Indian Hotels Company Ltd and Cholamandalam Investment and Finance Company Ltd.

Indian Hotels Company Ltd (IHCL)

Ruchit stated that the stock went through a corrective phase in last couple of months, but it managed for a support base around its 100 DEMA support. The stock has started moving higher from this support with good volumes and the RSI oscillator is also hinting at positive momentum.

“We advise traders to buy the stock in the range of ₹580-575 for potential target of ₹615. The stoploss on long positions should be placed below ₹560,” said Jain.

Cholamandalam Investment and Finance Company Ltd

Jain explained that post a sharp up move in the later half of April, the stock has been consolidating in a range since last couple of weeks. The price up moves were supported with good volumes and the recent price action has led to formation of a ‘Bullish Pennant’ pattern on the daily chart. The stock is trading around its 20 DEMA support, and hence we anticipate a positive momentum in the short term.

“We advise traders to buy the stock in the range of ₹1,270-1,260 for potential target of ₹1,360-1,360. The stoploss on long positions should be placed below ₹1,215,” said Ruchit. 

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 28 May 2024, 10:01 AM IST