Day trading guide: 2 stock recommendations for Monday

Amit Trivedi, YES Securities

Nifty closed in the positive for the third consecutive month in July, but monthly returns were minimal as the index remained within a 15600-15900 band. Nifty’s monthly high/low range was confined to 449 points which is its lowest monthly range since November 2019. Appearance of such a narrow range monthly pattern indicates that the markets are going through time wise consolidation since price decline has remained limited. Hence, monthly RSI for Nifty is neutral at overbought territory.

Ideal strategy to follow remains to focus more on stocks/sector specific as selected sectors will continue to do well.


Meanwhile, continuing recent underperformance, Bank Nifty ended lower for the consecutive month. Sustainability is required to gain some positive traction in the banking space.

Continuing the multi-month rally, the Metal index rose 8% this week. Mild pullback on downside is possible, however such corrective decline should be considered as buying opportunity.

IT index witnessed consistent up move, stocks specific rally within this space is likely to continue.

Recommendations

Buy Grasim at Rs 1,550-1,540.
Stop loss: Rs 1,515
Target price: Rs 1,630

Keeping a series of ascending tops and bottoms intact, recent decline found renewed buying interest near its 50 day average. Recovery thereafter could mea resumption of uptrend.

Buy Minda Corporation at near Rs 138
Stop loss: Rs 133
Target price: Rs 150

Appearance of sizable bullish candle with sustained move above important averages warrants positive outlook for the stock.

(The author, Amit Trivedi, CMT, is Technical Analyst - Institutional Equities, YES SECURITIES)