Market Trading Guide: Buy PNB and Sell OFSS on Wednesday. HDFC Securities explains why

Nifty ended sharply lower on Tuesday, dragged by a sharp decline in IT, auto and banking stocks. The index has fallen sharply after falling below the 21EMA, leading to a significant long recovery period. Commenting on current trends, Rupak De, Senior Technical Analyst at LKP Securities, said Nifty declined towards the 200DMA, where it found initial support and is likely to remain within the 25,300-25,750 range going forward. “It could fluctuate within a 450-point range amid increased volatility. The India VIX has remained high, which may keep investors on edge. However, until the 25,300 level is broken decisively, a meaningful rebound could take place. Hence, long trades can be considered with a stop loss below 25,300,” De added.

Here are 2 stock recommendations for Wednesday: Buy PNB at Rs 131.35 | Benefit: 7%

Stop loss: Rs 125

Target: Rs 141

Buy Punjab National Bank with a time frame of 2-3 weeks. The stock price was recently in a consolidation phase after a sharp upward move. We are seeing a sharp upward move from the bottom of Rs 118 levels since last week. The stock price is trying to move above the threshold of Rs 131-132 levels. Volume has started to grow during the share price’s upward breakout and the RSI is showing a positive indication. (Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities)

To sell OFSS at Rs 6,465 | Disadvantage: 5%

Stop loss: Rs 6,635

Target: Rs 6,140

The stock price has been on strong downward momentum in recent weeks. We see a bearish pattern over time such as lower highs and lower lows. Currently, it is trying to make a downside breakout from a few weeks’ range at Rs 6,450 levels. Volume and RSI patterns indicate a negative impact on the future stock price.

(Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities)

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