How to Trade Mphasis, Grasim, and REC Shares on July 22: Chandan Taparia’s Recommendations

Indian stock market benchmarks, the Nifty 50 and the Sensex, continued their losing streak for the second day in a row on Monday, July 22, ahead of the Union Budget 2024. The Nifty 50 ended the day down by 22 points (0.09%) at 24,509.25, while the Sensex dropped by 103 points (0.13%) to close at 80,502.08.

“Nifty index opened lower and after dropping to 24,360 zones, it quickly bounced back to 24,600 zones in the first hour. It then moved within a range and managed to close above 24,500 zones. It formed a small bullish candle with a longer lower shadow, indicating recovery from lower levels. Now, it has to hold 24,500 zones for an upward move towards 24,750 and 24,850 zones, with supports at 24,350 then 24,250 zones,” said Chandan Taparia, Head of Equity Derivatives and Technicals at MOFSL.

India VIX rose by 4.18% from 14.82 to 15.44 levels. Although volatility increased slightly, it remains low, which is reassuring for the bulls.

In options trading, the highest Call Open Interest (OI) is at the 25,500 and 25,000 strikes, while the highest Put OI is at the 24,000 and 23,500 strikes. Call writing is seen at the 24,500 and 25,700 strikes, while Put writing is seen at the 24,000 and 24,400 strikes. This data suggests a broader trading range between 24,200 to 25,000 zones and an immediate range between 24,300 to 24,700 levels.

Bank Nifty

Regarding Bank Nifty, Taparia said, “Bank Nifty Index opened slightly lower and dropped to 51,850 zones initially. However, it recovered well from lower levels and moved higher to 52,427 marks later in the day. It formed a small candle on the daily scale and is finding support near its 20-day exponential moving average (DEMA). Now, it needs to hold above 52,250 zones for an upward move towards 52,500 then 52,750 levels, with downside support at 52,000 then 51,750 levels.”

Stocks to Buy

Chandan Taparia has recommended three stocks to buy on July 22, which he believes are technically positioned for a good upward move.

1. MPHASIS: Buy at ₹2,925 | Target Price: ₹2,850 | Stop Loss: ₹3,070
   • MPHASIS has given a rounding bottom breakout on the weekly chart and is forming higher lows on the daily chart. It has formed a bullish candle on the daily chart and is trading at its 52-week high.
2. Grasim: Buy at ₹2,811 | Target Price: ₹2,920 | Stop Loss: ₹2,740
   • Grasim has formed a base near the 2,700 band and is taking support from there. It respects the 20 DEMA, and every small decline is being bought into.
3. REC: Buy at ₹618 | Target Price: ₹650 | Stop Loss: ₹600
   • REC Ltd has formed a bullish engulfing pattern on the daily chart. It has negated its series of lower lows on the daily chart and is inching higher.

By following these recommendations, investors can potentially capitalize on the expected upward moves in these stocks.