Stocks to buy: Raja Venkatraman recommends three stocks for today — 23 January
Source: Live Mint
Nifty 50 on 22 January: Recap
The Nifty and the Sensex experienced a rise, driven by HDFC Bank’s solid third-quarter results, which uplifted market sentiment. However, the overall optimism was curbed by declines in energy, metal, and state-run bank stocks. The IT index stood out as a top performer for the day, extending its gains late into the session and aiding the market’s recovery.
The major triggers plaguing the markets have been the persistent selling by foreign portfolio investors (FPIs), an economic slowdown, and underwhelming corporate earnings, which are significant concerns for Indian investors. The headline indices are hitting new lows, with broader markets likely to follow.
Emerging markets have yielded minimal returns over the past decade compared to the US market in US dollar terms. Any increase in inflows or reduction in selling in emerging markets might only be confirmed once the dollar weakens.
Indian stock markets: Way forward
We had concluded yesterday: “…PCR at 0.65 hinting at a potential rebound from oversold status…”. The bounce indicated occurred towards the end of the day, triggered by the HDFC Bank results that salvaged some lost pride. The incessant decline and the punishing poor Q3 numbers are highlighting the dismal show that we are observing from the street. The translation into the prices is not providing any encouraging signs to the market. With the constant pressure that is forcing the trends lower, the rally that we are seeing in the markets is not inviting any enthusiasm.
The Open Interest data are showing some strong Put writing at lower levels thus leading us to take this opportunity to reconsider shorting further. With deep oversold conditions being witnessed, a rally is possible. But one should look at the possibility of decline towards 23,500 where there is a set of resistances. The Max Pain at 23,300 remained with PCR now at 0.80, hinting at a potential rebound from oversold status. At the moment one needs to tread carefully as the sentiment is fractured, with no clarity on either side of the trends.
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Three stocks to buy, recommended by NeoTrader’s Raja Venkatraman:
• Britannia Industries Ltd: Buy above ₹4,960 | Stop ₹4,885 | Target ₹5,350
The FMCG sector is going through a rough patch and this stock is showing some signs of bottoming out as the rounding at lower levels is attracting some buying interest. The constant higher lows are slowly but steadily reassuring of some bullish momentum getting back into this counter. With a potential for more upside one can consider going long.
• Coromandel International Ltd: Sell on rally towards ₹1,830 | Stop ₹1,865 | Target ₹1,775
As weakness continues to build for the last few sessions, the breach of support with a long body candle is hinting at some downside in the days ahead. The prevailing negative sentiment is prompting us to reevaluate the upcoming trends. Selling on every rise within the resistance zone around 5,070 appears beneficial for prices. Currently positioned to descend beyond the cluster lows, it might be a good strategy to consider short-selling on rallies.
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• NESCO Ltd: Buy above ₹1,040 | Stop ₹1,020 | Target ₹1,150
NESCO, an industrial machinery manufacturer has been undergoing some volatile scenario saw a sharp upside on Wednesday as the momentum on the descent as the trends began losing its steam since the start of the year. As the prices are steadily higher highs for the last few days on Daily charts the trends indicate that the bullish momentum can persist. With a long body candle closing on Wednesday showing some promising signs look for further upside.
Raja Venkatraman is co-founder, NeoTrader.
