Stock market recommendations: According to Bajaj Broking Research, Tata Steel and Bharat Electronics are the top stock picks for today. Here’s their view on Nifty, Bank Nifty and the top stock picks for January 31, 2025:
Index View: Nifty
The Nifty index experienced a pullback for the third consecutive session on Thursday, closing the monthly expiry sessions with a gain of 0.37% at 23,249,50. Following a 13% correction from its all-time high of 26,277 over the past four months, Nifty appears to be forming a base within the 22,800-23,450 range in the last three weeks. This consolidation is happening ahead of major events like the Union Budget 2025, Delhi Election, and the RBI monetary policy outcome. Volatility is expected to stay elevated as these events approach.
Dips in the index are seen as potential buying opportunities, with strong support in the 23,000-22,800 range, which aligns with the current week’s low and a key trendline support. On the upside, resistance is located between 23,400-23,600 being the confluence of the 200-day exponential moving average (EMA), the previous major breakdown area and the almost identical highs from the past two weeks. A breakout above this resistance could shift sentiment and open up a move towards 24,000-24,200 in the coming weeks.
The market breadth indicator, measured by the percentage of stocks above the 50-day EMA in the Nifty 500, is recovering from oversold conditions. It reached a low of 8% last Tuesday and is now at 13%. Historically, the 5%-8% range has marked a rebound point for the Nifty, further supporting the potential for a pullback in the index.
Bank Nifty
Bank Nifty gained for the 3rd session in a row on Thursday to close higher by 0.3% at 49,311.95 levels. The index has witnessed a strong pullback during this week from the lower band of the last 3 weeks range (47,800-50,300) after the Reserve Bank of India (RBI) announced measures to inject over Rs 1.5 lakh crore into the money markets, marking the largest monetary easing since the pandemic. This move aims to address the liquidity shortfall caused by the RBI’s efforts to stabilize the rupee through dollar sales.
We expect the index to extend the consolidation in the range of 47,800-50,300. With key resistance placed around 50,300 levels being the confluence of multiple moving averages and previous major breakdown areas. Only a breakout above 50,300 will signal a shift in sentiment and open up a move towards 51,600-52,000 in the coming weeks.
Stock Recommendations:
Tata Steel: Buy in the range of Rs 129-132
The stock has been consolidating near the 200-week EMA for the past three weeks after a sharp 33% decline over the last seven months. Currently the stock is in oversold territory, it presents an attractive risk-reward setup. Strong support is seen around 122-123, which is expected to hold, providing a foundation for a potential bounce towards 146, a key retracement level and the 200-day EMA.
Bharat Electronics: Buy in the range of Rs 276-281
Bharat Electronics has been an outperformer in the Defense sector, with buying interest emerging over the last two sessions after forming a base above the 52-week EMA (currently at 264).
The stock has taken six months to retrace just 50% of its previous six-month up move (172-340), which indicates a positive bias. We expect the stock to continue its upward momentum and head towards 307 levels being the 80% retracement of the previous decline (320-253).
Disclaimer: The opinions, analyses and recommendations expressed herein are those of brokerage and do not reflect the views of The Times of India. Always consult with a qualified investment advisor or financial planner before making any investment decisions.