Stocks to buy: Raja Venkatraman recommends three stocks for today — 22 January
Source: Live Mint
Nifty 50 on 21 December: Recap
It has been a week of unprecedented events that led to some sharp drawdown on the broader indices. As the trends began to slip, there was widespread chaos due to the complete lack of clarity. The strong rebound in the wake of a historical global sell-off has sparked fear of the continuity of the uptrend. Both government and private banks faced a slump, and the automobile sector experienced a notable drop, severely affecting market sentiment. The small and mid-sized company indices suffered the most, falling deeper into the red and declining more rapidly than their larger counterparts.
The majority of the indices were in a sell-on rally mode led by large-scale volatility during the day, they eventually gave in to selling pressure due to various global and local factors that left investors anxious. By the end of the session, the Sensex fell by 1,235.08 points or 1.60% to settle at 75,838.36, and the Nifty dropped by 320.10 points or 1.37% to close at 23,024.65. A negative bias that is changing the trends in the market.
Indian stock markets: Way forward
As we mentioned yesterday: “…The option data is hinting at 23,500, seeing some strong Call writing that is holding back the bullish exuberance….”. The continued uncertainty broke the lower end of the range at 24,200, thus causing some downward reactions to unfold. With the sharp decline seen in the indices ahead of the Budget, we can conclude that the trends are going through a challenging phase. The sharp decline since September 2024 continued to keep the pressure on the indices, thus forcing the market lower.
The breach of the recent set of candles around the consolidation region has once again indicated the lack of participation for the next few days. As the hopes of a follow-through start dimming, one should look at the possibility of a decline towards 22,800 as an immediate target. The options data continue to hold on to Max Pain at 23,300 with PCR at 0.65, hinting at a potential rebound from oversold status. It is best to stay away from investing as we are still not out of the woods.
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Three stocks to buy, recommended by NeoTrader’s Raja Venkatraman:
• Datamatics Global Services Ltd: Buy at ₹665 | Stop ₹648 | Target ₹705
IT sector is going through some profit booking scenario while some select names have been able to revive, and the recent rally witnessed some sharp sell-off, and the inability of the price to hold on in the recent reaction indicates that the trends are showing some signs of buying interest. With a potential for more upside one can consider going long.
• Eicher Motors Ltd: Sell below ₹4,960 | Stop ₹5,070 | Target ₹4,770
As weakness continues to build for the last few sessions, the long body candle weakness on Tuesday sets the tone for the days ahead. The negative overhang is forcing us to reconsider the trends for the days ahead. A sell on every rise at the value resistance zone around 5,070 augurs well for the prices. Now, poised at heading lower beyond the cluster lows, one can consider going short.
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• Dr. Reddy’s Laboratories Ltd: Sell below ₹1,285 | Stop ₹1,305 | Target ₹1,225
Dr. Reddy’s, a pharma major has been on the descent as the trends began losing its steam since the start of the year. As the prices are steadily making lower lows on Daily charts the trends indicate that the bearish momentum can persist. With the value support area around 1,300 being broken and the RSI showing no signs of a recovery, we can expect more downside in the coming days.
Raja Venkatraman is co-founder, NeoTrader.
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.
