Market Trading Guide: Bajaj Finance and a smallcap stock offer up to 5% upside in near term. Here’s why

Nifty ended Friday with sharp cuts amid selling pressure across the board, with consumer, IT and energy stocks dragging the markets the most. India VIX also moved back above its 200-DMA, indicating rising fear among the market participants.

Commenting on the technical charts, Rupak De, Senior Technical Analyst at LKP Securities, said that the setup has turned relatively cautious, with the index slipping below its 20-DMA for the first time in the past few sessions. Additionally, it has breached the 38.2% Fibonacci retracement of the prior up move from 24,571 to 26,341, he added. “With the index closing below the key support level of 25,500, the near-term bias appears weak, and there is potential for a decline toward the 25,000 mark 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 | Upside: 5% | Target: Rs 1,500 | Stop Loss: Rs 1,320

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

Buy Bajaj Finance at Rs 1,024-1,026 | Upside: 4% | Stop Loss: Rs 990 | Target: Rs 1,070

Bajaj Finance is currently taking a breakout of the downward-moving channel on the daily time frame. The lower trend line has provided support, accompanied by the formation of a bullish candlestick pattern, indicating a potential short-term upward movement in the stock. Momentum Indicator RSI is trading near the overbought region, which confirms the bullishness in the script.

(Drumil Vithlani, Technical Research Analyst, Bonanza Portfolio)

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