Top Stock Recommendations: Dharmesh Shah of ICICI Securities suggests buying Reliance, Delhivery tomorrow

According to Vinod Nair, Head of Research at Geojit Financial Services, concerns over delayed US rate cuts, rising tensions in the Middle East pushing up oil prices, and muted Q4 earnings forecasts caused Indian markets to consolidated. 

The 30-share BSE Sensex closed lower by 793.25 points, or 1.06%, at the 74,244.90 level, while the Nifty 50 ended at the 22,519.40 level, down 234.40 points, or 1.03%.

Also Read: Stock market today: Sensex, Nifty 50 fall by 1% each on all-round selloff; investors lose over ₹2 lakh crore in a day

The outlook for the market in the coming week will be guided by the major global and domestic economic data, India WPI inflation data and WPI manufacturing data, China GDP growth rate, US Manufacturing Production Index, US Initial Jobless Claims and company earnings.

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities

The Nifty 50 surrendered the first three session gains on Friday amid global volatility led by higher US CPI data as participants resorted to profit-taking after a 1,100-point rally over the past three weeks led prices to overbought readings (daily stochastics >85).

Going ahead, we expect 22,800 to act as key resistance for the Nifty 50, being the value of last week’s highs and the upper band of the rising channel, and lead to a healthy price retracement of three-week gains, followed by consolidation in 22,200-22,800 amid stock-specific action as the Q4 FY24 earnings season commences.

Also Read: Oil settles 1% higher on Middle East crisis yet posts weekly loss on bearish demand outlook; Brent at $90/bbl

Structurally, the retracement of the recent rally would lead to a higher base formation above the rising 50-dema and a lower band of the channel around 22,200 levels. We believe short-term consolidation would pave the way for an eventual target of 23400 by June 2024. 

Bank Nifty is expected to consolidate in the broad range of 47,700–49,000 as the index is expected to undergo a healthy retracement of the past three weeks’s 3000-point rally. 

Key monitorable:

Sectorally, IT would remain in focus as earnings outcomes would dictate further direction for sector which is oversold. Any positive surprise from earnings would lead to decent upsides.

Breadth continues to remain as a percentage of stocks above 50-day ema sustained above 70% for the week.

Oil prices will be a key risk factor amid the brewing geopolitical situation. A spike in oil prices above $91 could lead to further profit booking.

Also Read: FPIs pump ₹13,347 crore in Indian equities, debt flows reduce in April so far: Will inflows continue in FY25?

Top Stock Recommendations:

Buy Reliance Industries Ltd (RIL) in the range of ₹2,920–2,950 for the target of ₹3,270 with a stop loss of ₹2,790.

Buy Delhivery Ltd in the range of ₹458–468 for the target of ₹540 with a stop loss of ₹410. 

Also Read: Small-cap stock in focus: Hazoor Multi Projects declares ₹486 crore fundraise on preferential basis

Disclaimer: The Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 12/04/2024 (preceding date) or have no other financial interest and do not have any material conflict of interest.

The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 14 Apr 2024, 12:54 PM IST