Buy Call: Two Technical Stock Selections By Sumeet Bagadia on January 23, a Tuesday

Markets Level Up and Consolidate
“Nifty opened with a gap up in a special trading session on Saturday but traded sideways to down throughout the day to close 77 points lower at 21,572,” said Mr. Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities. The Long-Short ratio continued to decline as FPIs aggressively built short positions in Index futures and liquidated their long holdings, with the ratio closing at 46.95% on Friday, January 19, from 49.09% on Thursday, January 18.

In Index futures, the FPIs currently have a greater proportion of short holdings than long ones. In Nifty, strong put writing (bulls’ entrance) was seen at strike numbers 21,500 and 21,600, while call writers were seen leaving (bears’ exit). Robust put writing at a certain strike price is often seen as an indication that the likelihood of a price increase is increasing. Indications regarding the direction of Nifty in the next few days may be seen in the options activity near the 21,500 Strike. Should authors leave the 21,500 Strike, the decline might continue till 21,000 levels.”

“Bank Nifty opened with a gap up but remained sideways throughout the day and added 1 point to its previous close to end at 46,058,” said Ashwin Ramani about the forecast for the index. The Bank Nifty saw call writers leaving (bears withdrawing) between the 45,800 and 45,000 strike levels, which prevented the Index from falling below 45,900. The option action at 46,000 Strike, where the call and put writers engaged in combat, will determine how the Bank Nifty will go going forward.

Nifty Reports Weekly Losses; Expect High Volatility Next Week
“On a weekly basis, Nifty ended the week at 21,571.80, marking a decline of 323 points (down 1.47%) from 21,894 levels,” said Om Mehra, Technical Analyst, SAMCO Securities. Metals, real estate, and pharmaceuticals all saw selling pressure. Every time there was an effort to break through significant resistance, there was a sell-off. The market showed signs of consolidation around the 21,500–21,750 zone, indicating further sideways movement. Weekly resistance is around 21,850, while weekly support is at 21,400 levels on the upper Bollinger band. Globally, there was some late-week selling in the US and European markets, which would have affected Indian market sentiment about profit-booking.”

Om Mehra said, “During the week, Bank Nifty experienced a notable 3.36% loss, closing at 46,058.20.” in reference to the index’s prognosis. The 20-day Simple Moving Average (SMA), the primary technical indicator, is at 47,100, which is a strong resistance level. Furthermore, a violation of the 200-day Moving Average (DMA) of around 44,500 serves as a crucial support level and might exacerbate selling in the index.

“The PSU Bank stocks’ strong performance is noteworthy; they gained a respectable 3.36% over the course of the week. This increase was crucial in maintaining the positive attitude around banking equities. Pre-budget emotion might cause more volatility in the next week, which has been shortened by one day. There will only be three trading sessions the following week since markets are closed on Monday,” he said.

Stocks to Purchase
The Indian stock market will be closed on Monday, January 22, in honor of the national holiday designated for the “Pran Pratishtha” ceremony held at the Ram Temple in Ayodhya. On January 23, Choice Broking’s executive director Sumeet Bagadia suggested buying two stocks. Here are the technical analysis from Colgate-Palmolive (India) and IRB Infrastructure Developers.

In India, Colgate-Palmolive
Purchase COLPAL cash at Rs. 2536.2, set a stop-loss at Rs. 2503, and aim for Rs. 2596.

COLPAL is trading at an all-time high of 2550 levels, demonstrating strong bullish momentum. Strong trading volumes have backed the recent breakthrough over the critical resistance at 2525 levels, which is an important technical event that highlights the strength of the stock. The discovery raises the possibility that the rising trend will continue, providing investors with a positive outlook.

To further support its bullish outlook, COLPAL is also trading above important moving averages, such as the short-term (20 Day), medium-term (50 Day), and long-term (200 Day) EMAs. The relative Strength Index (RSI), a momentum indicator, is now at 64 levels.

It is essential for traders to monitor the strong support level around 2503 levels, as a breach of this level may indicate a change in market attitude. The present technical configuration of COLPAL indicates a favorable atmosphere for future upward growth, as long as traders and investors keep a careful eye on critical support and resistance levels and stay alert to any reversals.

We advise purchasing COLPAL at the CMP of 2536.2 and a stop loss of 2503 in order to reach the objective of 2596, based on the research shown above.

Developers of IRB Infrastructure
Buy IRB with cash at Rs. 49.25; set a stop loss at Rs. 48.75; and aim for Rs. 51.15.

At 49.25, IRB is trading right now. The 48.75 level has shown to be a dependable support zone for the stock as it has been a constant source of support. Between 48 to 50 is the predicted trading range for the stock, with sideways movement possible within this range. The stock may go toward the 51.15 level in the next few days if there is a strong closure above the 49.55 mark.

IRB’s Relative Strength Index (RSI) is 69, suggesting room for growth. The Stochastic RSI also shows a positive crossing, which supports the optimistic outlook. Notably, the stock’s strength is shown by the fact that it is trading above all key moving averages.

It seems like a good idea to purchase IRB at the current market price of 49.25, especially in light of these technical signs and the state of the market. To limit possible risks, a realistic objective for this trade might be set at 51.15, with a suggested stop-loss at 48.75.

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Neither the author nor Greynium Information Technologies provide any advice on the aforementioned suggestions, which are offered by market experts. No liability would be assumed by the author, the brokerage business, or Greynium for any losses incurred from choices made in reliance on this article. Before making any financial decisions, consumers are advised by Goodreturns.in to speak with qualified professionals.