Budget 2022 Stock Picks: Pre-Budget Market Outlook and Best Stocks to Buy

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Budget
by Ruchit Jain Last Updated: 2022-01-31T14:35:26+05:30 IST

Market Outlook
 

market outlook

 

Post the Budget 2021, our markets have seen a relentless upmove and have formed a record high of over 18600 in the month of October. However, Nifty has gone through a corrective phase since mid-October and the index corrected from the highs of 18600 to 16400. Nifty did pulled back again above 18300 mark, but ahead of the Budget 2022, we have seen a sharp correction towards 17000 again.

In last few weeks, the global markets have been playing a major factor in determining the short term momentum. The U.S. indices too have corrected ahead of the FED event and they are trading around their medium term supports now. So we believe that in the near term, we could see a relief in the global equities sell-off. If we look at the longer term charts of Nifty, then as per Elliott Wave Analysis, are we in a corrective phase wave iv of an uptrend.

Hence, this correction ahead of this major event could be a good opportunity for traders and investors to look for buying opportunities. The ‘200 DEMA’ and the recent swing low support zone is around 16600-16400 and until this is breached, one should trade with a positive bias. On the flipside, 17500-17600 would be immediate short term levels to watch out for, and if markets see a sustained upmove above this then it could surpass the recent sing high within next couple of months.

In the recent corrective phase, the banking space has shown a relative strength and we believe this index has completed its corrective phase around the recent low and have started an impulsive upmove. Hence, this sector could take the leadership now and outperform in the next leg of upmove. Apart from banking, the Auto space too has seen decent buying in last few weeks and thus, one should look for opportunities from this space on declines for decent short term returns. 


Budget 2022 Stock Picks - Best Stocks to Buy


ACC (CMP 2214.75)
 

market outlook

 

 

a) The stock has seen a time-wise correction in last few months and is now trading around its crucial supports.

b) In this consolidation, the volumes were low in corrective phases and recently we have seen rising volumes along with price upmoves.

c) Prices are trading around its ‘200 DEMA’ support and thus the risk reward ratio is favourable for longs.

d) The ‘RSI’ oscillator on the weekly charts is around its support.

e) Hence, traders can look to buy ACC Cement stock in the range of Rs.2215-2200 with a stoploss below Rs.2085 for potential targets of Rs.2350 and Rs.2440. 


Axis Bank (CMP 764)

market outlook

 

a) The banking sector recently showed a good relative strength and hence, we expect outperformance from this sector.

b) After a corrective phase, Axis Bank has started forming a ‘Higher Top Higher Bottom’ structure.

c) In the recent upmove, the volumes are much higher than its daily average volumes, indicating buying interest in this counter.

d) The short term as well as medium term moving averages are rising and prices trending above its moving average supports is a positive sign .

e) Hence, traders can look to buy Axis Bank stock in the range of Rs.764-758 with a stoploss below Rs.724 for potential targets of Rs.805 and Rs.834. 


Indian Hotels (CMP 207.05)
 

market outlook

 

a) In the recent corrective phase, the stock has formed a ‘Double Bottom’ around Rs.172.

b) It is now forming a ‘Higher Top Higher Bottom’ structure indicating an uptrend in the stock.

c) In last few months, the price upmove have been supported by rising volumes while the volumes on correction are less, which is a positive structure.

d) The stock is also on the verge of breakout from its trendline resistance of 212, and a move above that could trigger a sharp upmove in the short term.

e) Hence, traders can look to buy Indian Hotels stock above Rs.212 with a stoploss below Rs.195 for potential targets of Rs.229 and Rs.242. 


NTPC (CMP 140.25)
 

market outlook

 

a) In the recent correction, the stock prices have taken support around its ‘200 DEMA’ support.

b)The stock has recently seen a good buying interest which can be seen through rising volumes along with price upmove.

c) The weekly chart exhibits a ‘Higher Top Higher Bottom Structure’ which is a sign of an uptrend.

d) The ‘RSI’ oscillator is indicating a positive momentum and hence, we could see further momentum in the stock in the near term.

e) Hence, traders can look to buy NTPC stock in the range of Rs.140-135 with a stop loss below Rs.131 for potential targets of Rs.49 and Rs.156.

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                                    Check this video on Budget 2022 Stock Picks by Ruchit Jain

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Also Read:-

Union Budget 2022 - Things to Know About

Union Budget for Taxpayers: Will IT Slab Increase or Decrease ?

What Traders and Investors Expect from this Union Budget 2022

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About the Author

Ruchit Jain is Lead Research Analyst at 5paisa. He has a vast experience of 14 years in this field and is proficient in Technical and Derivatives Research. He has completed his CMT (U.S.A.) and has done Masters in the field of Finance at Mumbai University.

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