Market Trading Guide: Bajaj Finance and smallcap stocks offer up to 5% upside in the short term. This is why

Nifty closed with sharp cuts on Friday amid selling pressure across the board, with consumer, IT and energy stocks trailing the markets the most. The India VIX also rose above its 200-DMA, indicating rising fear among market participants. Commenting on the technical charts, Rupak De, Senior Technical Analyst at LKP Securities, said the setup has become relatively cautious, with the index dipping below the 20-DMA for the first time in the past few sessions. Moreover, it has broken the 38.2% Fibonacci retracement of the previous rise from 24,571 to 26,341, he added. “With the index closing below the key support level of 25,500, the short-term bias appears weak, and there is potential for a decline towards 25,000 in the short term. On the upside, immediate resistance is seen around 25,800,” De said.

Here are 2 stock recommendations for Friday:

Buy Kirloskar Oil Engines at Rs 1,375-1,385 | Positive: 5% | Target: Rs 1,500 | Stop loss: Rs 1,320

Kirloskar Oil Engines is currently breaking out of the completed bottom formation on the daily time frame. The RSI is trending upward, reflecting positive momentum, and the stock is finding support at the 21-day EMA, with all major EMAs rising. The stock is trading above major moving averages, indicating a bullish trend. 1,320 could serve as immediate support, and at 1,500 a hurdle can be seen.(Drumil Vithlani, Technical Research Analyst, Bonanza Portfolio)

Buy Bajaj Finance for Rs 1,024-1,026 | Positive: 4% | Stop loss: Rs 990 | Target: Rs 1,070

Bajaj Finance is currently breaking out of the downside channel on the daily time frame. The lower trendline has provided support, accompanied by the formation of a bullish candlestick pattern, indicating potential upside in the stock in the near term. Momentum Indicator RSI is trading near the overbought area, confirming the bullishness in the script.

(Drumil Vithlani, Technical Research Analyst, Bonanza Portfolio)

(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)