The market is trying to revive, but every bounce is being sold into. That suggests the underlying trend lacks conviction and is not receiving support from news flow or investor sentiment.
Indian equities fell sharply on 23 June, with the Sensex dropping more than 500 points and the Nifty 50 nearly 200 points as weakness spread across sectors.
Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:
ZYDUSLIFE (Cmp 1112.20)
ZYDUSLIFE: Buy above ₹1115, stop ₹1075 target ₹1225 (Multiday)
- Why it’s recommended:ZYDUSLIFE is an Indian multinational pharmaceutical company headquartered in Ahmedabad, Gujarat. it ranks as one of the largest healthcare and life sciences providers in India, specializing in the development, manufacturing, and marketing of generic drugs, biosimilars, vaccines, and consumer wellness products. The stock has been moving quite aggressively in the last few weeks. After some consolidation the volume has picked up crossing important resistance zones around 1100 suggesting that the upmove could sustain. With some upward revival in Relative Strength Index (RSI) to cross above 60, we can look at initiating long.
- Key metrics:
- P/E: 31.16,
- 52-week high: ₹1119,
- Volume: 2.43M
- Technical analysis: Support at ₹1050, resistance at ₹1300.
- Risk factors: Company is highly exposed to global regulatory scrutiny, particularly from the USFDA.
- Buy : above ₹1115.
- Stop loss: ₹1075.
- Target price: ₹1225 (2 Months)
ITCHOTELS (Cmp 178.35)
ITCHOTELS:Buy above ₹179, stop ₹167 target ₹195 (Multiday)
- Why it’s recommended:ITC Hotels Ltd is a premier Indian hospitality company, established originally in 1975, that transitioned into an independent publicly traded entity following its demerger from ITC Limited. The trends in this stock has been quite promising and the constant rounding at higher levels are indicating some steady upward traction. Post some consolidation at higher levels we can note that the prices are getting set to move higher as long body candle with volume emerges, we can now look for some trends to carry the prices higher.
- Key metrics:
- P/E Ratio : 44.86,
- 52-week high: ₹261.35,
- Volume: 11.38M.
- Technical analysis: Support at ₹160, resistance at ₹200.
- Risk factors: Primarily revolving around the cyclical nature of travel demand, growing reliance on an asset-light management model, and macroeconomic headwinds.
- Buy : above ₹179
- Stop loss: ₹167
- Target price: ₹195 (2 Months)
FLUOROCHEM (Cmp 3890.90)
FLUOROCHEM:Buy above ₹3900, stop ₹3775 target ₹4250 (Multiday)
- Why it’s recommended:Gujarat Fluorochemicals Limited (GFL) is a leading Indian chemicals company and the country's largest producer of fluoropolymers. The last few months have seen a higher high higher low with the steady trendline support being formed at lower level clearly spelling out positive trends. As volume build up is steady the strong thrust seen on lately. With the Average Directional Index firmly headed higher with volumes indicate a potential upward bias.
- Key metrics:
- P/E Ratio : 63.01,
- 52-week high: ₹3929,
- Volume: 110.83K.
- Technical analysis: Support at ₹3700, resistance at ₹4300.
- Risk factors: Including high valuation sensitivity, heavy capital expenditures in the developing EV battery segment, and exposure to international trade policy and tariffs.
- Buy : above ₹3900
- Stop loss: ₹3775
- Target price: ₹4250 (2 Months)
Stock market today
Metals led the decline, pressured by Vedanta’s ₹2,150 crore block deal and a stronger US Dollar Index crossing 101, which weighed on acquisition costs. IT stocks extended their weakness, with Infosys and TCS down 3% each ahead of Infosys’ AGM.
The sell-off mirrored the global tech rout, as South Korea’s KOSPI crashed 10%, triggering circuit limits, with Samsung Electronics and SK Hynix tumbling over 12% on reports of chip expansion slowdown. The sharp fall in KOSPI spilled into US futures, with Nasdaq contracts down 700 points, S&P 500 off 100, and Dow futures lower by 360. On Dalal Street, barring pharma, all sectoral indices traded in the red. Analysts highlighted Nifty support at 23,800–23,900, while resistance remains near the 24,200 mark.
Outlook for trading
Volatility continues to disturb the market sentiment, despite the clarity achieved in terms of the resistance the trends remain challenged on either side. While Nifty is trying to sustain the higher levels the constant selling pressure is keeping a lid on every rise. At the moment the lows at 23,000 will remain an important point to consider. With the market holding the support zones to retain the bullish stance we need to be careful as we move ahead into the week.
Yesterday we had highlighted the possibility of a revival as the gap support combined with Fibonacci supports would look to and identified the levels around 23,800 would be a good area to consider for a long position. The test of these levels has emerged yet again as we trade into this curtailed week, we should be looking at a potential revival. The dip into the support region mentioned on the charts found some good buying interest coming into it and could now generate some revival as the RSI is now seen holding the 30 levels and hinting at some upward trajectory.
We are now observing that the Max Pain Point has shifted to 23,850 as the PCR remains supressed below 1 indicating that the selling pressure has stepped up once again. The labels 1 and 2 are clearly spelling out some heavy resistances at work. Currently the trends are spending some time to hold on to the bullish bias seen on Monday, the lack of encouraging triggers thus leading the trends through some challenging times. Time for being alert as trends are attempting to get clearer.
While the trends in the indices are still unclear there is plenty of action as far as the stocks are concerned. We should now restrain from entering short positions in the Nifty and await some confirmation as Nifty attempts to hold above 23,800. One can maintain that, viewing any sustained move below that level as a clear sign that bullish conviction is losing strength.
Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.
Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.
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.