Sagar Doshi of Nuvama Professional Clients Group suggests Aarti Industries, Delhivery, and Dixon Technologies (India) Ltd Futures as his top stock recommendations for Thursday, April 18, 2024.
The Indian stock market witnessed a day of consolidation on Tuesday, April 16, with both the Sensex and Nifty 50 extending their losing streak for the third consecutive session. Early trading was marked by heavy selling pressure, although the Nifty 50 managed to recover from intraday lows, mitigating some of the decline's severity. The S&P BSE Sensex closed down 456.10 points, or 0.62%, at 72,943.68, while the NSE Nifty 50 ended 124.60 points lower, or 0.56%, at 22,147.90.
The India VIX, a measure of market volatility, surged by over 12%, closing at 12.62, up 1.18% on Tuesday. Sectoral indices presented a mixed picture, with the Nifty IT Index falling 2.58% and the Nifty Media Index rising 1.57%. Notably, the Nifty SmallCap Index outperformed the benchmark indices, finishing 0.75% higher.
According to Vinod Nair, Head of Research at Geojit Financial Services, the domestic market's consolidation was driven by concerns surrounding global tensions and a reduced likelihood of near-term interest rate cuts. A stronger dollar index and higher US bond rates, spurred by better-than-expected US retail sales data, added to the market's anxieties. The IT sector experienced the most significant decline, attributed to disappointing domestic Q4 results and lowered US discretionary spending estimates impacting earnings, Nair explained.
The stock market will be closed today, April 17, in observance of Ram Navmi.
Nifty 50 Outlook by Sagar Doshi, Senior Vice President - Research, Nuvama Professional Clients Group:
Sagar Doshi notes that the Nifty 50 has corrected nearly 3% from its all-time highs in the last three trading sessions, primarily due to geopolitical tensions in the Middle East. IT stocks have significantly contributed to this downturn, as expectations for US Federal Reserve rate cuts have been further pushed back following recent inflation data. The Nifty 50 has retested the lower end of its three-month channel. Based on historical patterns, Doshi suggests that if Tuesday's low of 22,079 holds, the Nifty 50 is likely to resume its upward trajectory towards 22,420 / 22,610.
Bank Nifty Outlook:
The Bank Nifty has retraced 50% of its recent rally, falling from approximately 45,800 to 49,000 in the past four weeks. The 50% Fibonacci retracement level, standing at 47,440, is currently acting as a demand zone for the index. Doshi anticipates a potential upside towards 47,800 / 49,250, provided that the 47,300 level is not decisively breached.
Top Stock Recommendations by Sagar Doshi for Thursday, April 18:
- Aarti Industries Ltd (BUY): LCP: ₹747.00; Stop Loss: ₹720.00; Target Price: ₹805.00
- Doshi highlights the stock's renewed momentum, driven by a bullish cup and handle pattern. The stock has reached a fresh 52-week high, further reinforcing its bullish trend.
- Delhivery Ltd (BUY): LCP: ₹454.00; Stop Loss: ₹437.00; Target Price: ₹485.00
- Since February 2024, the stock has been consolidating within a range of 485 to 420. Momentum indicators are signaling a potential bullish breakout.
- Dixon Technologies (India) Ltd Futures (April) (SELL): LCP: 7,569.00; Stop Loss: 7,840.00; Target Price: ₹7,040.00
- Doshi notes a lack of sustained buying interest after the stock hit a fresh high, coupled with a swing breakdown, suggesting that sellers are gaining control.
Disclaimer: Investment in the stock market is subject to risk. Please consult your financial advisor before taking any investment decision.
