Gains on Friday helped Indian stock markets close a volatile week on a high. The Nifty rose 2% to close at 23,622.90 and the Sensex gained 2.3% to settle at 75,527.94 as easing geopolitical tensions and falling crude prices lifted investor sentiment. The Sensex rose 1.7% last week, while the Nifty gained 1.1%.
Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:
JINDALSTEL (Cmp ₹1148.50)
- Why it’s recommended: Jindal Steel Limited is a major Indian multinational steel, it is the country's third-largest private steel producer and the sole player manufacturing track rails. The stock witnessed sharp profit booking and the decline brought it to important supports. After testing April lows, the stock on daily charts formed a spinning top and the prices after consolidation is seen staging an upmove backed by volumes. The last session saw a volume lead rise with a long body candle that is now helping to signal some upward revival in Relative Strength Index (RSI) from the neutral zones. We can look to initiate long.
- Key metrics:
- P/E: 38.12,
- 52-week high: ₹1306.20,
- Volume: 448.59K
- Technical analysis: Support at ₹1100, resistance at ₹1500.
- Risk factors: Commodity price volatility, International geopolitical tensions, port congestion, and shipping rate fluctuations.
- Buy : above ₹1153.
- Stop loss: ₹1115.
- Target price: ₹1240 (2 Months)
VTL (Cmp ₹627.85)
- Why it’s recommended: Vardhman Textiles Limited (VTL) is India’s largest vertically integrated textile manufacturer, operates across the entire textile value chain, exporting high-quality products to over 75 countries worldwide. The trends are showing a steady uptrend during the year and has managed to hold its highs despite the market fluctuations. The demonstration of robust processes emerged the prices are now moving out of the shadows with a potential to move higher.
- Key metrics:
- P/E Ratio : 24.56,
- 52-week high: ₹647,
- Volume: 220.54K.
- Technical analysis: Support at ₹590, resistance at ₹800.
- Risk factors: Customer Concentration, relies on a limited number of suppliers for critical raw materials.
- Buy : above ₹630
- Stop loss: ₹600
- Target price: ₹690 (2 Months)
BLUEJET (Cmp ₹512.50)
- Why it’s recommended: Blue Jet Healthcare Limited is a science-led pharmaceutical and healthcare ingredients company, operating as a niche, end-to-end Contract Development and Manufacturing Organisation (CDMO) supplying APIs and intermediates to multinational healthcare and FMCG companies. The trends are showing a steady revival and the recent consolidation at higher levels with volumes indicate a potential upward bias. A strong Q4 number has generated buying interest and relative strength index indicates an attempt to rebound. As the encouraging Q4 numbers emerged the prices are now moving out of the shadows with a potential to move higher.
- Key metrics:
- P/E Ratio : 35.87,
- 52-week high: ₹1027.80,
- Volume: 1.39M.
- Technical analysis: Support at ₹440, resistance at ₹600.
- Risk factors: Raw material suppliers, geographic concentration of manufacturing facilities in Maharashtra, and regulatory exposure in highly-regulated export markets like the EU and US.
- Buy : above ₹515
- Stop loss: ₹490
- Target price: ₹558 (2 Months)
Stock Market Recap
Sensex and Nifty rallied sharply as easing geopolitical tensions and falling crude prices lifted investor sentiment, with the market reacting to US President Donald Trump’s claim that a deal to end the war with Iran is nearly complete. The move pushed all major sectors into the green, led by oil-related stocks, while broader indices like the Nifty Midcap 100 and Smallcap 100 also gained strongly.
Lower Brent crude helped improve India’s macro outlook by easing pressure on inflation, the trade deficit, and the rupee. Global markets were firm too, adding to the positive tone. The rupee strengthened, and India VIX declined, showing reduced fear in the market.
The higher levels attracted supplies, inducing large-scale volatility. The steady pressure emerging at higher levels have led to weakness emerging across the board. As the sectors ended the week in uncertainty, there is a continued hope of surpassing 24000 levels.
Outlook for Trading
In the last week, the market was threatening us with a possible changing pattern- it had more consecutive lower lows for the first time since the April lows. But it managed to save itself by turning around briskly and then proceeding to punch higher towards 23800 which is an important support zone. But that too didn’t help much as those levels were not held either, and the Nifty came down to test lower levels. All this to and fro created a mess on the chart. There has been so much small-range volatility that it has been almost impossible to make out a trend over the past five weeks.
It has therefore been a bit of a frustrating time for traders because just as they get comfortable going long or holding it, the prices take a turn and slump. No sooner than you have sold out the longs and switched to short, the market shoots up again, makes higher highs and trips up all the shorts too. Day traders in particular suffered a lot of anguish, but it is not just them; even the 1-3-day traders suffered difficulties in handling the market.
But perhaps some solutions have finally emerged that can lend support to the next earnings season. The market awaits some encouraging triggers to bring some relief. For the past few weeks, markets have been bereft of any specific news and hence tended to follow the moves overseas and suffered in turn.
While short covering action could emerge, we need to be ready to scale as the market is currently in the midst of heavy news flow, and volatile geopolitical tensions will likely impact sentiment. After a while, some positive news flow is about to unveil, keeping the shorts in check. Nifty was facing a resistance around 23750 as mentioned on Friday, we need to see if the trends successfully moves beyond.
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.