In today’s market update, Osho Krishan, Senior Analyst for Technical & Derivatives at Angel One, has spotlighted two key stocks: Axis Bank Ltd and EIH Ltd. With the Indian stock market entering a volatile phase, Krishan’s stock recommendations reflect strategic buying opportunities based on technical support levels. As investors navigate fluctuating trends, these stocks present favorable conditions for short-term and medium-term gains.
Market Overview
Thursday began on a cautiously optimistic note for Indian equity markets. The domestic benchmark indices, Nifty 50 and Sensex, opened slightly higher, reflecting investor confidence despite market volatility.
The Nifty 50 registered a minor increase of 0.34%, opening at 25,067.05 points, while the Sensex climbed by 365.56 points, starting the day at 81,832.66 points. This marginal uptick hints at positive sentiment, though market experts advise caution given the unpredictable trading environment.
The market volatility is further amplified by external factors. The Reserve Bank of India’s (RBI) recent shift to a neutral stance has impacted investor decisions, with level-based trading becoming a popular strategy.
The passing of Ratan Tata, Chairman Emeritus of Tata Sons, on October 9 has led to some reflections on long-term investment approaches, particularly within the Tata group’s vast business empire. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted the importance of a patient, long-term perspective for capital market growth.
Stock Picks: Why Osho Krishan Recommends Axis Bank and EIH
Osho Krishan’s stock recommendations for Thursday come in the context of a complex market environment. His technical analysis suggests that Axis Bank and EIH are both nearing key support levels, making them potential buys for investors looking to capitalize on reversals in trend.
Axis Bank Ltd
Axis Bank has been under pressure recently, with its stock declining by over 10% in the past few trading sessions. Despite this correction, Krishan sees an opportunity for a rebound. The stock is approaching its 200-day simple moving average (SMA), which, historically, has provided robust support. The significance of this support level cannot be understated, as it has frequently signaled an upward reversal in Axis Bank’s stock price in previous market cycles.
Furthermore, technical indicators have shifted from overbought to oversold levels. This transition is crucial for short-term traders, as it signals that the selling pressure might be nearing exhaustion. The combination of strong technical support and the oversold condition suggests that Axis Bank could experience a reversal, offering potential gains for investors who enter the stock at the current price levels.
Krishan recommends buying Axis Bank around ₹1,160–₹1,150, with a stop loss at ₹1,100. The potential upside target is ₹1,240–₹1,250, providing a healthy risk-reward ratio for traders.
EIH Ltd
EIH Ltd, another stock on Krishan’s buy list, has also seen a notable correction. The stock recently dropped from its peak of ₹499 and is now approaching its 200-day SMA. However, Krishan points out that EIH has shown signs of a consolidation breakout, with increasing momentum pushing the stock past key exponential moving averages (EMAs) on the daily chart.
The Moving Average Convergence Divergence (MACD) indicator, a popular tool for identifying trend reversals, has also shown a positive crossover. This crossover suggests that the stock’s bearish momentum may be waning, and a bullish trend could be in the making. With technical indicators aligning in favor of a trend reversal, Krishan believes that EIH Ltd presents an attractive buying opportunity at current levels.
For EIH Ltd, Krishan suggests buying the stock around ₹400, with a stop loss set at ₹380. The target price for EIH is ₹435–₹440, offering a respectable upside for investors.
Broader Market Sentiment: Investors Should Exercise Caution
Despite these promising stock recommendations, the broader market remains uncertain. Krishan notes that the Nifty 50 index is trading within a challenging range, with the lower support zone around 24,800–24,700 expected to provide significant backing. If this level holds, it could prevent further downside movement. However, if breached, it could trigger additional selling pressure.
At the higher end, resistance between 25,250–25,300 poses a formidable challenge for bullish traders. The 20-day exponential moving average (20-DEMA), hovering around 25,360, is also expected to play a pivotal role in the market’s near-term direction. These technical levels highlight the importance of level-based trading, especially as the market navigates its current volatility.
Market experts have cautioned investors to avoid aggressive trades in either direction and to focus on risk management. In such unpredictable conditions, maintaining a disciplined approach can be key to weathering the fluctuations.