Stock market today: Trade setup for Nifty 50 to US Fed rate cut, five stocks to buy or sell on Monday — Sept 16

Stock market today: Friday's trading was dull, and the Indian stock market ended a little lower as it took a break after a strong rally on Thursday. The Nifty 50 index ended 32.40 points lower at 25,356.50 marking losses of 0.13% on Friday while the S&P BSE Sensex after shedding 77.17 point also ended 0.9% lower at 82,890.94

Bank Nifty, however, defied the trend followed by benchmark indices, ending the day with 0.32% gains on Friday.

Banks and Telecom remained top performers during the week, while PSUs and autos were the top underperformers. The Nifty-50 Index ended the week with around 2% gains over the previous week's close and outperformed most of the Asian Peers and Emerging markets. The broader trend of the markets, thereby, can be assumed to still be positive, though volatility persists.

Trade setup for Monday

Nagaraj Shetti, senior technical research analyst at HDFC Securities, said the Nifty's short-term trend continues to be positive. A sustainable move above 25,400 could pull the Nifty 50 index towards the next upside of around 25,800 in the near term, said Shetti. As per him, Immediate support for Nifty today is placed at 25,200.

For the Bank Nifty too Bank Nifty that has managed to maintain its strength, ultimately closing on a positive note at 51,938 on Friday, despite volatility the analyst expect positve momentum continues. Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C Mehta, said that the index has witnessed a breakout of a cup and handle pattern on the daily chart, indicating strength. According to this pattern, the index could test 52,800–53,000 in the short term as per Yedve and 53,800 in the medium term. The 21-DEMA support is currently placed near 51,220. Therefore, Yedve recommends “buy on dips” strategy for Bank Nifty as long as it stays above 51,220.

US Fed rate cut in focus

Overall Siddhartha Khemka, Head of Research — Wealth Management at Motilal Oswal, expects the market to consolidate in a broader range and investors to remain cautious as major banks worldwide will announce their policy statements this week. With a 25bps rate cut by the ECB and China expected to cut rates on $5tn mortgages in an upcoming US Fed meeting, hopes of the US Fed rate cut are higher. This has been further strengthened by recently released inflation and disappointing employment data in the US. Thus, interest-sensitive sectors are likely to be the focus next week.

Stocks to buy today

Stock picks for the day include two recommendations by stock market expert Sumeet Bagadia, Executive Director at Choice Broking, and three picks by Ganesh Dongre, Senior Manager of technical Research at Anand Rathi. They have recommended buying five shares: Gujarat Fluorochemicals Ltd, Century Textiles and Industries Ltd, Mishra Dhatu Nigam Ltd, Sakthi Sugar, and Ami Organics Ltd.

Sumeet Bagadia's stocks to buy toda

1] Gujarat Fluorochemicals: Sumit Bagadia, Executive Director at Choice Broking recomend Buying Gujarat Fluorochemicals in cash market. The current share prices stands at ₹4389.6 while Bagadia recomend buying keeping a stop Loss at ₹4222 for a target price of ₹4646

On the daily chart, the stock has formed a strong bullish momentum candle, signifying a resurgence of strength in its price action, as per Bagadia. A robust support level is situated at 4222 levels. This confluence of support factors enhances the stock's stability and resilience. Gujarat Fluorochemicals is trading above all the important moving averages, underscoring its overall bullish posture and trend.

2] Century Textiles and Industries: Bagadia recommends buying Century Textiles with a stop Loss at ₹2790 and a target of ₹3155. Century Textiles is trading at a current market Price of ₹2896.10.

The daily chart analysis offers a favorable view for the following week, indicating a steady higher advance, said Bagadia. Notably, the stock has produced a notable higher high and higher low pattern in weekly frame and the company's recent upward swing has effectively violated the neckline, establishing a new week high. This breakthrough indicates the possibility of a significant follow-through upward increase in the stock price.

Ganesh Dongre, stocks to buy today

3] Mishra Dhatu Nigam Ltd- Ganesh Dongre, Senior Manager - Technical Research at Anand Rathi Research recommends buying Mishra Dhatu Nigam Ltd share price that is currently trading at close to ₹398. Dongre recommends keeping a stop loss at ₹390 and buying for target price of ₹425.

In the recent short-term trend analysis of the stock, a notable bullish reversal pattern has emerged. This technical pattern suggests the possibility of a temporary retracement in the stock's price, potentially reaching around Rs. 425. At present, the stock is maintaining a crucial support level at Rs.390 Given the current market price of Rs.398, a buying opportunity is emerging. This suggests that investors might consider purchasing the stock at its current price, anticipating a rise towards the identified target of Rs. 425.

4] Sakthi Sugar: Dongre recommends buying Sakthi Sugar at ₹38 keeping a stop loss at ₹35 for a target price of ₹42. On the daily chart of this stock, support at ₹35 level has been observed, signaling a potential upward trend. Complementing this breakout, the Relative Strength Index (RSI) is still turning up, indicating increasing buying momentum. Given these technical indicators, traders can consider buying on dips, entering the stock at a lower price point. To manage risk, a stop loss at Rs. 35 is recommended. The target price for this strategy is Rs. 42 in the upcoming weeks as per Dongre, suggesting a potential gain as the stock continues its upward trajectory.

5] Ami Organics: Dongre recommends buying Ami Organics at ₹1510, keeping stop loss at ₹1480 for a target of ₹1560. On the short-term chart, this stock has formed a bullish engulfing pattern , which is inherently bullish in nature. Currently priced at Rs. 1510, this formation signals a potential upward trend. To effectively manage risk, a stop loss at Rs. 1480 is recommended. .The target price for this strategy is Rs. 1560 in the upcoming weeks. as per Dongre. This suggests a potential gain as the stock continues its upward trajectory, backed by the bullish technical signals.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.