Stocks to Watch: ONGC and HUL Recommended for Strong Uptrend Potential, By Ruchit Jain

On Tuesday, the Indian stock market faced a drop in key indices, Sensex and Nifty 50, primarily due to the performance of HDFC Bank. The Sensex fell by 0.87% to 78,956.03, while the Nifty 50 declined by 0.85% to 24,139. HDFC Bank, the biggest private bank in India, saw a 3.4% drop, leading the market’s losses.

The global index provider MSCI recently increased the limit on how much of HDFC Bank’s shares foreign investors can buy. However, the changes will happen in two stages, in August and November, instead of all at once this month as many expected. This staggered adjustment likely contributed to the bank’s decline.

Vinod Nair, Head of Research at Geojit Financial Services, noted that the market entered a risky phase in the second half of the trading day. The industrial sector is showing slow growth, and continuous selling by foreign investors, along with high stock valuations, are adding to the market’s challenges.

Currently, the market is paying close attention to profit growth, which has been weak this quarter. If profits don’t improve in the coming quarters, we could see some downgrades. Most sectors saw declines, except for banking, metals, telecom, and fertilizers. HDFC Bank’s drop was due to lower-than-expected inflows after MSCI’s recent index update.

Market Outlook by Ruchit Jain:

Ruchit Jain from 5paisa observed that the Nifty 50 index faced some selling pressure on Monday but managed to recover. The index couldn’t break through the 24,480–24,500 resistance level. The daily RSI (Relative Strength Index) hasn’t turned positive yet, so the next moves will be important. While 24,200 is the immediate support level, a move above 24,500 could push the index higher towards 24,630. For now, traders should focus on specific stocks and wait for clearer signals before making big moves.

Stocks to Watch This Week:

1. ONGC (Oil and Natural Gas Corporation Ltd):
   • The stock is currently in an uptrend, forming a ‘Higher Top Higher Bottom’ pattern. Recently, it found support around the 40-day moving average and has started to rise again. The trading activity is positive, indicating that the uptrend may continue.
   • Traders can consider buying ONGC in the range of ₹338-333, aiming for a target of ₹364. A stop loss should be set below ₹322.
     
2. HUL (Hindustan Unilever Ltd):
   • HUL has been in an uptrend over the past few months, with price increases supported by strong trading volumes. Recently, the stock has been consolidating, which appears to be a temporary pause before continuing its upward move.
   • Traders can look to buy HUL on dips in the range of ₹2,720-2,700, with a target of ₹2,900. A stop loss should be set below ₹2,600.