Following disappointing results from the Q2 2024 season and significant selling by foreign institutional investors (FIIs) and domestic investors, the Indian stock market experienced its third consecutive day of decline on Tuesday. The Nifty 50 index dropped by 309 points, closing at 24,472, while the BSE Sensex fell 930 points to end at 80,220. The Nifty Bank index also saw a sharp decline, losing 705 points to settle at 51,257. Mid-cap and small-cap indices faced substantial selling pressure, decreasing between 2.5% to 3.8%. Global market trends were also negative, as investors assessed third-quarter corporate earnings amidst uncertainty regarding global economic growth and interest rates. However, the extent of weakness in the Indian markets was particularly pronounced.
Stock Recommendations by Vaishali Parekh
Vaishali Parekh, Vice President of Technical Research at Prabhudas Lilladher, indicates that the Indian stock market has turned bearish after the Nifty 50 index fell below the 24,700 mark. Parekh highlights that the Nifty 50 index has crucial support at the 24,000 level. She also notes that the Bank Nifty index is showing a bearish trend and could decline to around 49,300 if it breaks below the psychological 51,000 mark.
In terms of stock recommendations for Wednesday, Parekh suggests three shares to consider: Tata Power, REC, and Poly Medicure.
Market Overview
Regarding the outlook for Nifty today, Vaishali Parekh stated, “The Nifty 50 index has breached below the neckline of the head and shoulder pattern on the daily chart at the 24,700 zone, indicating a bearish bias and suggesting further declines in the coming days. Sentiment remains cautious, with the index having crucial support around the 24,000 level. If it fails to hold this, it may test the significant 200-period moving average at the 23,300 level soon.”
She further mentioned, “The Bank Nifty index has shown a substantial bearish candle, indicating weakness, and a decisive drop below the 51,000 level could trigger further declines, with the next significant support near the 200-period moving average at 49,300 levels.”
Immediate Support and Resistance Levels
According to Parekh, Nifty’s immediate support today is at 24,300, while resistance is seen at 24,600. The Bank Nifty is expected to trade within a daily range of 50,700 to 51,600.
Stocks to Buy or Sell on Wednesday
- Tata Power: Sell at ₹434, target ₹420, stop loss at ₹445.
- REC: Sell at ₹509, target ₹490, stop loss at ₹528.
- Poly Medicure: Buy at ₹2,573, target ₹2,800, stop loss at ₹2,500.
These recommendations come as investors navigate a challenging market environment, urging caution in trading strategies.
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