Synopsis: The article summarizes the stock market's decline, citing weak global cues and geopolitical tensions. Analyst Ruchit Jain advises caution amidst uncertainty, recommending buying ONGC stocks and selling Birlasoft Futures, with target levels provided.
Stock Market Update: Beginning the trading session on Tuesday, the domestic benchmark equity indices, namely the Sensex and the Nifty 50, saw a decline, in line with their Asian counterparts and influenced by weak global cues. This downturn was primarily attributed to investor concerns, which were already heightened due to geopolitical tensions in the Middle East and the anticipation of a potential delay in US Federal Reserve rate cuts.
Tuesday's opening of the Asian markets mirrored the previous day's weaker performance on Wall Street, which was impacted by better-than-expected US retail sales data and decreasing prospects of an early rate cut by the US Federal Reserve.
With rising treasury yields, persistent inflation, tensions in the Middle East, and a strengthening US Dollar Index, investors opted to stay away from Dalal Street during Monday's session.
The 30-share BSE Sensex concluded at a level of 73,399.78, marking a decline of 845.12 points or 1.14%, while the NSE Nifty 50 closed at 22,272.50, down by 246.90 points or 1.1%.
Experts noted a further cause for concern as the India VIX surged by nearly 12 levels to close at 12.46, up 8.07%. All sectoral indices ended in the red, with the Media Index experiencing the most significant losses, followed by the public sector undertakings (PSU) Banking Index during Monday's session.
Market Review and Outlook - Ruchit Jain
The week commenced on a negative note due to escalating geopolitical tensions over the weekend. According to Ruchit Jain, Lead Research Analyst at 5paisa, the Nifty 50 experienced some recovery from its early low of 22,260 but faced selling pressure at higher levels, ending the day around 22,270 with a loss of over one percent.
Jain highlighted that the Nifty 50 began a corrective phase last week from its resistance level of 22,750, with negative global news impacting sentiments. This led to a broad market sell-off, except for the oil and gas sector. The RSI oscillator signaled weak momentum with a negative crossover, while heavyweight stocks from the banking and IT sectors experienced significant corrections. Jain emphasized the importance of the index finding support around the 40-day Exponential Moving Average (DEMA) at around 22,200 for a potential rebound. Below this level, support is anticipated around 22,000, followed by the 89-day DEMA at 21,720. On the upside, surpassing 22,500 is seen as crucial for a resumption of the uptrend.
Share Market Tips for Today
Given the prevailing global uncertainty, Jain suggested that near-term momentum would be heavily influenced by news flows and global market movements. Therefore, traders are advised to maintain cautious trading positions and be highly selective in stock-specific trades.
Stocks in Focus Today - Ruchit Jain
Regarding stocks in focus for Tuesday, Ruchit Jain recommended two stocks: Oil and Natural Gas Corporation Ltd (ONGC) and Birlasoft Futures.
ONGC (Buy)
Jain noted that ONGC had been consolidating within a range for the past few months, indicating a time-wise correction within an uptrend. The stock recently broke out from a 'Diamond' pattern, a bullish signal in technical analysis, with strong volume support and positive momentum indicated by the RSI oscillator. Traders are advised to consider buying the stock in the range of ₹280–277, with a potential target around ₹303. The stop-loss for long positions should be placed below ₹265.
Birlasoft Futures (Sell)
