The Sensex opened at 81,327.61, and surged over 800 points, or 1%, to an intraday high of 82,021.64. The Nifty 50 began at 24,744.25, also climbing more than 1% to touch 24,946.20. Both indices later pared some gains, with the Sensex ending 410 points, or 0.51%, higher at 81,596.63, and the Nifty 50 closing up 130 points, or 0.52%, at 24,813.45.

Broad-based buying lifted the broader market as well, with the BSE Midcap index rising 0.90% and the Smallcap index gaining 0.51%.

In this context, here are top three stock picks from Ankush Bajaj to watch in the near term:

• Why it’s recommended: On the daily chart, the stock has given a reverse head and shoulder breakout, also given breakout of rising wedge at ₹788 level. On lower time frame, RSI is trading positively, confirming the trend.
• Key metrics: Resistance level: ₹840– ₹850 (short-term target zone) Support level: ₹775 (pattern invalidation level) Pattern: Reverse head and shoulder + rising wedge breakout RSI: Bullish and confirming trend
• Technical analysis: The stock has broken out of bullish patterns, with price trading above key breakout levels. RSI confirmation on lower time frame adds strength to the setup. Sustaining above ₹788 increases the probability of upside.
• Risk factors: Breakdown below ₹775 may invalidate the breakout. Negative market sentiment or weakness in the financial sector may impact the setup.
• Buy at: ₹800
• Target price: ₹840– ₹850 in 4–5 days
• Stop loss: ₹775

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Buy: IDBI Bank Ltd (IDBI) (current price: ₹94.50)

• Why it’s recommended: On the daily chart, the stock has given a rectangle breakout at the ₹88 level and has closed two days higher from that level. On lower timeframe (45 min), ADX is trading above 50 and RSI is above 73, showing strong momentum in price. We can see ₹100+ levels soon.
• Key metrics: Resistance level: ₹100– ₹102 (short-term target zone) Support level: ₹91.50 (pattern invalidation level) Pattern: Rectangle breakout RSI: Strong momentum (73+), ADX above 50
• Technical analysis: The stock has broken out of a consolidation rectangle with strong follow-up buying. Momentum indicators like ADX and RSI on lower timeframes support a sustained upmove. Sustaining above ₹91.50 keeps the bullish structure intact.
• Risk factors: Breakdown below ₹91.50 may invalidate the breakout. Any negative news from the banking sector or broad market weakness may affect momentum.
• Buy at: ₹94.50
• Target price: ₹100– ₹102 in 4–5 days
• Stop loss: ₹91.50

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Buy: Ashok Leyland Ltd (ASHOKLEY) (current price: ₹244.60)

• Why it’s recommended: On the daily chart, RSI is trading above the 65 level and ADX is at 22, indicating strengthening momentum. The stock has given multiple breakouts around the ₹236 level, including a falling wedge and a double bottom breakout. On the lower timeframe (45 min), the stock has also given a bullish flag pattern breakout near ₹228, which gives a projected target around ₹270.
• Key metrics: Resistance level: ₹260– ₹262 (short-term target zone) Support level: ₹236 (pattern invalidation level) Pattern: Falling wedge + double bottom + bullish flag RSI: Above 65, ADX at 22
• Technical analysis: Multiple bullish patterns have been confirmed on both higher and lower timeframes. Sustained price action above ₹236 with strengthening RSI and trend momentum indicates a strong bullish setup.
• Risk factors: Breakdown below ₹236 may invalidate the bullish patterns. Broader market weakness or sector-specific news can impact price action.
• Buy at: ₹244.60
• Target price: ₹260– ₹262 in 4–5 days
• Stop loss: ₹236

Market closes higher after volatile session; pharma, PSE stocks lead gains

The Indian stock market witnessed a volatile trading session on Wednesday, 21 May, but ultimately ended on a firm note.

Positive global cues and strong domestic buying had led to a gap-up opening, with the Nifty nearing the psychological 25,000 mark early in the session. However, this level proved to be a strong resistance, triggering sharp intraday selling. Despite the pullback, markets staged a V-shaped recovery in the second half, erasing losses and closing in the green.

The Nifty 50 ended 129.55 points, or 0.52%, higher at 24,801.35, while the BSE Sensex rose 410 points, or 0.51%, to settle at 81,596.63. Bank Nifty also advanced, gaining 197.75 points to close at 55,075.10, reflecting continued momentum in the financial sector.

All sectors ended higher, with the rally led by pharmaceuticals, public sector enterprises, and real estate. The Nifty Pharma index climbed 1.25% amid defensive buying during intraday volatility. The PSE index added 1.21%, buoyed by renewed interest in energy names and value buying in government-owned firms. The realty index rose 1.72%, recovering from early weakness on the back of sustained interest in infrastructure themes.

Among top movers, Bharat Electronics Ltd surged 5.28% on strong institutional interest and robust order inflows. Cipla gained 1.93% on optimism around export performance, while Tata Steel rose 1.86%, extending gains post a strong Q4 and positive sentiment in metals.

On the downside, a few names lagged the broader rally. IndusInd Bank slipped 1.57% amid profit booking after recent gains. JSW Steel fell 1.17% on global commodity concerns, while Kotak Mahindra Bank edged 0.84% lower on institutional selling pressure.

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Despite the volatility, the sharp recovery and broad-based participation underscored the market’s resilience, with key indices holding above crucial technical levels.

Nifty Technical Analysis

After the recent rally, Nifty closed slightly lower at 24,776 on 20 May, forming a small red candle on the daily chart. Despite the mild decline, the index continues to display strength and remains firmly positioned above the key support zone.

The broader trend remains bullish as the index is trading well above its medium-term support levels. The 20-day moving average is at 24,509 and the 40-day DEMA at 24,054 – both comfortably below the current market price, confirming the underlying positive momentum.

On the daily chart, Nifty remains above key moving averages, which suggests that the medium-term trend is intact. The RSI is holding above 63 and the MACD remains in positive territory, reinforcing the bullish bias.

However, on the hourly chart, Nifty has closed below both the 20-hour moving average (24,857) and the 40-hour EMA (24,809), indicating short-term weakness or likely consolidation in the coming sessions. Hourly RSI has dropped below 55 and MACD has given a negative crossover, further confirming a dip in short-term momentum.

Open interest (OI) data shows that the highest call OI is at the 25,000 strike and the highest put OI is at the 24,800 strike. Additionally, there is good call-side build-up at 24,800 and 24,850 and put-side build-up at 24,800 and 24,750, suggesting a tightly packed expiry range. 

The Put-Call Ratio (PCR) stands at 0.76, indicating a mildly bearish to neutral sentiment among market participants. India VIX has risen to 17.54, up by 1%, signalling a possible increase in intraday volatility.

The recent price action is being led by heavyweight stocks such as BEL, Cipla, Tata Steel, and HDFC Life, which have shown relative strength even as the index showed signs of cooling off.

Strategy Outlook

Given the tight OI range between 24,800 and 25,000, combined with short-term bearish signals on the hourly chart, expiry is expected to be range-bound. 

A neutral strategy like an Iron Condor is suitable in such conditions. Traders can consider selling a 24,750 put and 25,000 call while buying a 24,700 put and 25,050 call to limit risk. This strategy benefits if the market stays between 24,750 and 25,000 and volatility remains stable. A decisive break on either side of this range would require quick adjustment or exit.

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Conclusion

While the broader uptrend in Nifty remains intact as long as 24,875 holds, short-term indicators suggest caution. Increased volatility and mixed signals from momentum indicators point to a potential range-bound expiry session.

Traders are advised to keep a close watch on 24,875 for downside protection and 25,000 as the resistance cap. Any breakout beyond this range could shift the short-term sentiment decisively.

Ankush Bajaj is a Sebi-registered research analyst. His registration number is INH000010441.

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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.