Buy or sell: Ruchit Jain of 5paisa recommends buying Tata Chemicals and Max Financial Services stock this week

The BSE Sensex opened lower by 104.87 points or down 0.14% at 73,767.42 level while the Nifty 50 opened at 22,371.25 level, down 34.30 points or 0.15%.

“While the market is steady the small cap index is showing some strain with a cut of 0.5% yesterday. Perhaps there is some selling happening in small caps in response to the SEBI advisory to mutual funds flagging concerns of excessive valuations. Weakness in the small cap segment is likely to continue. While there is fundamental support to the Indian stock market, high valuations can constrain further rally. The market is likely to remain range-bound in the near-term. As expected RIL has crossed ₹3000 level,” explained Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Also Read: Nifty 50, Sensex today: What to expect from Indian stock market in trade on March 5

The Sensex and the Nifty 50, finished at new all-time high levels on Monday’s session amid a volatile session that included buying in energy and banking shares as Moody’s revised its 2024 India GDP growth projection based on “better than expected” economic data.

On Monday, the 30-share BSE Sensex ended higher by 66.14 points higher or 0.09% at 73,872.29 level while the Nifty 50 closed at 22,405.60 level, up 27.20 points or 0.12%.

Sector-wise, it was a mixed bag on Monday’s session, with buys witnessed at Oil & Gas, Financials, and Private Banking, according to Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services Ltd. Given that the government is expected to announce infrastructure projects worth over Rs. 1 lakh crore in the next days, most of which are tied to the power sector, sectors including capital goods, infrastructure stocks, and electricity were gaining traction. To add to the upsurge in power stocks, domestic power demand increased by 8% in February to a record high of 128 billion units.

Also Read: Stock market today: Nifty 50, Sensex end higher for 4th consecutive session; smallcaps falter

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Nifty 50 Outlook

Nifty 50 started the first day of the week around 22,400 and traded within a narrow range throughout the day. The index ended around the opening levels itself, thus forming a small ‘Doji’ candlestick pattern on the daily chart, said Ruchit Jain, Lead Research Analyst at 5paisa.

After a time-wise corrective phase for about a month, our markets resumed the positive momentum during last week post the GDP data. The index remains in an uptrend, but if we look at the stock-specific action, many stocks within the midcap and the small cap names have been going through a corrective phase. The broader trend remains positive as the index has continued to move higher, the RSI is positive and the index trades above the moving averages as well. However, the immediate support is placed a bit lower around 22,200, where the average support is seen on the lower frame chart, and the open interest in the derivatives segment is highest at the 22,200 put option, explained Jain. 

Also Read: Indian stock market: 6 key things that changed for market overnight – Gift Nifty, China’s GDP to rise in US bond yields

Share Market Tips For This Week

“Hence, for the index, one should trade with a buy-on-dip approach, while stock specific opportunities could provide better opportunities. One notable data also was the advance decline ratio in the NSE, which was more in favour of declines inspite of index trading at highs. Thus, one should be very selective in stock picking as well,” advised Ruchit. 

Stocks To Buy This Week – Ruchit Jain

On stocks to buy this week, Ruchit Jain recommended two stocks – Tata Chemicals Ltd and Max Financial Services Ltd.

Tata Chemicals Ltd

Ruchit stated that on the daily chart, the stock has pulled up from the multiple supports along with the higher volume and sustained above the 21-day SMA. Additionally, the price has moved above the Upper Bollinger Band formation, indicating further upside potential. Traders may consider a buying opportunity in the range of ₹1,003–990 with potential targets of ₹1,070 and ₹1,100, while maintaining a stop loss at ₹948 levels.

Max Financial Services Ltd

According to Jain, on the daily timeframe, the stock has experienced a breakout from a consolidation phase and has moved above a falling trendline, indicating a potential uptrend in the short term. Traders may consider buying around ₹1,000 to ₹985 with a stop loss below ₹940. The upside targets are ₹1,060 and ₹1,120.

Also Read: Tata Motors share price skyrockets 4.5% on demerger plan, crosses ₹1,000 for first time

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 taking any investment decisions.

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Published: 05 Mar 2024, 10:23 AM IST