Indian Equity Market: Indian stock market indices closed down around 0.5 per cent on Wednesday on profit booking after hitting higher highs. The Sensex fell 426.87 points or 0.53 per cent to close at 79,924.77, while the Nifty 50 fell 108.75 points or 0.45 per cent to close at 24,324.45.
Meanwhile, the Bank Nifty index fell 379.50 points or 0.72 percent to close at 52,189.30. At closing, the index ranged from a high of 52,528.80 to a low of 52,075.40.
“Nifty surged to new all-time highs, supported by auto and pharma stocks. We remain constructive today and expect Nifty to move towards 24,550-24,600 levels. On the downside, 24,300 is expected to act as a key support area,” brokerage ICICI Direct said in a report.
ICICI Direct Research has recommended two stocks – Alkem Laboratories and Asian Paints India – as buy/sell this week.
Stock Selection
Alkem Laboratories: ₹5060-5085 | Target Price: ₹5410 | Stop Loss: ₹4874.9
The pharmaceutical industry is showing signs of strength again after several weeks of consolidation. Alchem Laboratories has taken a long position in the futures sector, with rising deliveries indicating accumulation at low levels during the consolidation phase. The current momentum in the pharmaceutical industry and the current setup of the stock price indicate a favorable scenario in terms of both risk and reward, suggesting a possible rally towards the 5410 level.
Asian Paints India: Sell at ₹2925-2935 | Target Price: ₹2780 | Stop Loss: ₹3021
Paint stocks have underperformed relative to major indexes over the past few months. The stock has failed to break out of the key resistance level of 3000. Moreover, options data shows that the 3000 call strike has the largest open interest, indicating strong supply. The stock has again fallen from current levels, creating a short selling opportunity. We believe the stock could fall towards lower levels.
Disclaimer: The views and recommendations provided in this analysis are those of the individual analysts or brokerage firms and not those of Mint. As market conditions change rapidly and individual circumstances may differ, investors are strongly advised to consult with a qualified professional before making any investment decisions.
