Investment Analyst Suggests Buying Shares in AJAX Engineering, Elgi Equipments, and KFin Technologies

Indian Stock Market Rallies on Eased Restrictions and Improved Sentiment

The domestic benchmark indices, the Nifty 50 and the BSE Sensex, advanced on Tuesday, April 21, driven by gains in financial stocks after the Reserve Bank of India eased some restrictions on rupee derivative trading. The improved sentiment was also fueled by steady domestic earnings and optimism around potential U.S.-Iran peace talks.

As of 10:27 IST, the Nifty 50 rose 0.55% to 24,499.30, while the BSE Sensex gained 0.64% to 79,022.11. Financial stocks led the rally, with heavyweight lenders advancing about 0.5%, and broader banking indices, including private and state-run banks, rising around 1% each. The RBI's move has helped ease concerns over potential losses for banks and improved overall market confidence.

Market Outlook

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The Nifty 50 has continued to show strength, with a gain of +150 points on Friday, bringing the last week's tally to over +750 gains on the index. The index has reclaimed its hurdle of 24,250-24,262, which it was facing for the past 2-3 trading sessions, allowing for an extended upside of 24,750-24,800 in this leg. Support for this trade is seen below 24,100.

The Bank Nifty has also seen significant gains, with nearly 500 points in gain on Friday. The index has reclaimed the 56,400 mark on a daily and weekly closing basis, which was acting as a supply zone, and can now move forward towards 57,100/57,650.

Stock Recommendations

Sagar Doshi of Nuvama recommended three stocks to buy on Wednesday:

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• AJAX Engineering Ltd: The stock has seen a sharp rebound, resulting in a bullish trendline breakout, which has remained in play for the past 6 months. There is also an inverted (bullish) head and shoulder formation on short-term charts, opening up for a quick 10% rally from CMP.
• Elgi Equipments Ltd: The stock is attempting a breakout from an 18-month descending trendline, a key resistance across timeframes. It has reclaimed its 200-week moving average, signaling downside exhaustion, and momentum indicators support the move, with RSI divergence and a trendline breakout.
• KFin Technologies Ltd: The 15-month trendline breakout has been confirmed on daily and weekly charts of KFin Technologies. A strong base has formed below 900 last month, and an initial bounce of 7-8% upside cannot be ruled out at this space.