Market Trading Guide: 2 stock ideas for Monday with up to 8% near-term gains

Nifty ended lower on a volatile Friday, dragged by banking, metal and realty stocks, breaking its two-session gaining streak. The index slipped from around the support-turned-resistance zone of 23,800.

Rupak De, Senior Technical Analyst at LKP Securities, said Nifty has been forming lower tops on the daily chart, indicating a bearish setup. Besides this, the index faces strong resistance at the 20-EMA on the daily timeframe and the 50-EMA on the weekly timeframe, he said.

"India VIX has surged nearly 9% from the day’s low following the breakout in Brent crude prices. The RSI remains in a bearish crossover and continues to decline, indicating weak momentum. In the near term, the index may witness renewed selling pressure once Nifty falls below 23,500. On the downside, a breach below 23,500 could drag the index towards 23,150 and possibly lower levels. On the upside, 23,800 is expected to continue acting as a key short-term point of polarity," De added.

Here are two stocks to buy:

Buy Kirloskar Oil at Rs 1,740–1,750 | Upside: 4%

Stop loss: Rs 1,680

Target: Rs 1,825

Kirloskar Oil Engines Limited delivered a strong breakout above the Rs 1,680 resistance zone with a sharp bullish candle supported by robust volumes, indicating renewed buying momentum. The stock continues to trade well above all major EMAs, confirming a strong uptrend structure. The RSI has also rebounded sharply and is moving higher, reflecting improving momentum after recent consolidation. As long as the stock sustains above the breakout zone near Rs 1,680, the bullish momentum is likely to continue. The overall structure favors a buy-on-dips approach for short-term upside continuation.

(Virat Jagad, Sr. Technical Research Analyst, Bonanza Portfolio)

Buy Wheels India at Rs 1,467 | Upside: 8%
Stop loss: Rs 1,410
Target: Rs 1,580

Wheels India witnessed a strong bullish breakout supported by exceptional volume expansion, indicating aggressive institutional buying interest. The stock is trading in lifetime-high territory and sustaining well above all major EMAs (20-, 50-, 100- and 200-day), confirming a strong long-term uptrend. Price action remains highly positive, with continuous higher highs and higher lows. The RSI is near 80, reflecting strong momentum, though short-term volatility may remain elevated after the sharp rally. CMP is around Rs 1,467, and it can be considered a buy-on-dips near current levels with a stop loss around Rs 1,410. On the upside, the stock has the potential to move towards Rs 1,580 initially, then Rs 1,650, as momentum and volume participation remain strong.

(Virat Jagad, Sr. 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)