Nuvama’s Sagar Doshi Suggests REC, Can Fin Homes as Buys; Recommends Selling Aurobindo Pharma

Stock Market Overview: At the start of trading on Wednesday, both the Sensex and Nifty 50 indices experienced selling pressure, opening slightly lower. The Nifty 50 began at 25,008.55 points, down 48.80 points (0.19%), while the Sensex opened at 81,646 points, down 173 points (0.21%).

Analysts noted that foreign institutional investors are selling off, but domestic investors are buying, which may help the Nifty 50 stabilize around the 25,000 mark. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that the ongoing bull run in India is mainly driven by strong domestic investments, which have helped counter foreign selling pressure.

While the market should continue to receive support from domestic investments, high valuations may limit further gains. Vijayakumar expects the Nifty to hover around 25,000 during this consolidation phase. Upcoming Q2 earnings are predicted to be disappointing, with the exception of the IT, banking, and some automotive sectors.

Nifty 50 Outlook by Sagar Doshi, Nuvama:

Sagar Doshi, Senior Vice President of Research at Nuvama, noted that the Nifty 50 is facing resistance at last week’s high. However, the charts are showing a higher high pattern on the hourly timeframe, suggesting buying on dips. He sees potential for short covering, which could push the index toward 25,300-25,400, with 24,900 acting as a demand zone.

Bank Nifty Outlook:

The Bank Nifty is showing strength and has closed at a two-week high. For two consecutive days, it has closed above the resistance level of 51,800, which could allow for further gains towards 52,350 or 52,550. On the hourly charts, the Bank Nifty is moving higher within an upward channel, with support emerging around 51,600.

Stocks to Buy or Sell:

Sagar Doshi has recommended three stocks for today:

1. REC Ltd (BUY):
   • Last Closing Price: ₹547.85
   • Stop Loss: ₹525
   • Target Price: ₹590
     REC had recently closed below its 200-day moving average (DMA) but has since recovered. Daily charts suggest continued buying momentum, potentially pushing prices up by 8% to 10%.
     
2. Can Fin Homes Ltd (BUY):
   • Last Closing Price: ₹888.45
   • Stop Loss: ₹850
   • Target Price: ₹980
     Can Fin Homes is forming a cup and handle pattern after reversing near its 200 DMA support. A breakout above ₹900 could lead to a 10-12% rally, pushing it to new all-time highs.
     
3. Aurobindo Pharma October Futures (SELL):
   • Last Closing Price: ₹1,485
   • Stop Loss: ₹1,525
   • Target Price: ₹1,382
     Aurobindo Pharma has shown bearish trends, forming a fresh bearish flag pattern. Selling pressure could escalate if it drops below ₹1,470, leading to a potential 6-8% decline, with support around ₹1,380.