Raja Venkatraman recommends three stocks

Stock Market Recap: Markets continued to fail, remaining in a bear grip as the benchmark Sensex crashed 800 points, or 1%, on Thursday, while the Nifty 50 fell below 23,650, shedding more than 200 points, or 1%.

Weakness in banking and auto stocks dragged indices lower. The Nifty Auto index dropped over 6% in two sessions. The Nifty Bank index also fell sharply, shedding 635 points to 55,101. Nifty Midcap index lost 207 points to 56,254.

Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:

AJANTPHARM (Cmp ₹3119.50)

• Why it’s recommended: Ajanta Pharma Ltd, established in 1973 and headquartered in Mumbai, is a specialty pharmaceutical company focused on branded generics in India, emerging markets, and US generics. This sector is now witnessing fresh demand as there is continued attention to all companies associated with the Pharma sector. In the current year the stock has seen a sharp upside and the steady support offered by the KS line has ensured that the momentum is retained, we can consider that the trends are poised to move higher. Go long.
• Key metrics:
  • P/E: 39.41,
  • 52-week high: ₹3054,
  • Volume: 297.69K
• Technical analysis: Support at ₹3000, resistance at ₹3400.
• Risk factors: Regulatory compliance, intense market competition, and geopolitical issues being the most significant.
• Buy : above ₹3125.
• Stop loss: ₹2990.
• Target price: ₹3350. (2 Months)

POWERGRID (Cmp ₹303.60)

• Why it’s recommended: Power Grid Corp. of India Ltd (POWERGRID) is a 'Maharatna' CPSU playing a key role in national grid management. They also offer telecommunications and consultancy services. After some support from the cloud region, prices are holding the bullish bias. As momentum has revived one can look at more upside in store in the next few days. Go long now.
• Key metrics:
  • P/E: 18.94,
  • 52-week high: ₹321.75,
  • Volume: 15.28M.
• Technical analysis: Support at ₹285, resistance at ₹350.
• Risk factors: High capital expenditure, regulatory environment, and counterparty weaknesses.
• Buy : above ₹305
• Stop loss: ₹280
• Target price: ₹340 (2 Months)

TIMKEN (Cmp ₹3486.50)

• Why it’s recommended: Timken India Ltd (TIL) is a leading manufacturer of engineered bearings and industrial motion products, specializing in tapered roller bearings for automotive, rail, and industrial sectors. At the current juncture the prices have broken important supports once again. Looking at the strengthening momentum and the strong thrust post consolidation, we can definitely look for force gaining strength towards the upside. With the overall banking and finance sectors showing weakness across the board, one should consider selling for a multiday play.
• Key metrics:
  • P/E Ratio: 58.14
  • 52-week high: ₹3575
  • Volume: 60.40K
• Technical analysis: Support at ₹3250, resistance at ₹3900.
• Risk factors: Susceptible to industrial slowdowns, geopolitical tensions and lagging revenue growth.
• Buy : above ₹3490.
• Stop loss: ₹3370.
• Target price: ₹3850. (2 Months)

Stock Market Recap

On 12 March, Indian equity markets extended their decline for a second straight session, with the Sensex tumbling 829 points to close at 76,034 and the Nifty slipping 228 points to 23,639, falling below the 23,650 mark. Weakness in banking and auto stocks dragged indices lower, as the Nifty Auto index dropped over 6% in two sessions, led by losses in M&M, Maruti Suzuki, and Eicher Motors. The Nifty Bank index also fell sharply, shedding 635 points to 55,101, while the Nifty Midcap index lost 207 points to 56,254.

Market breadth remained weak, with 37 Nifty stocks ending in the red and the NSE advance-decline ratio at 2:3. Among gainers,

Coal India surged nearly 5% to top the Nifty chart, while Aarti Industries rallied over 5% after securing a $150 million agrochemical supply contract. On the downside, L&T slipped nearly 3%, Colgate-Palmolive India dropped over 10% in two sessions, and food delivery firms Eternal and Swiggy fell up to 3% amid LNG shortage concerns.

Outlook for Trading

The current flow of activity clearly establishes the strong grip of the negative sentiment that is forcing everyone to relook at the scheme of things. As support levels loose meaning the trends ahead are becoming fuzzy with absolutely no one in control over the market sentiment. As global cues continue to dictate the market proceedings, we should now be looking at the rally as a sell opportunity.

Trends are not clear as we can see from the charts, the repeated gap down movement has curtailed the ability of the trends to sustain. With sustained selling pressure we are noticing that the trends are attracting supplies on every rally. Despite the best intentions the market lost its way and the steady breakdown of support region is now causing a deterioration in the sentiment. With no clarity on the future, we should be looking at some slow sedate movement that can continue. The trend that is emerging clearly suggests that the support are now giving away and the strong movement to the downside ensured that the prices traded much below expected levels in last few days.

Hence , one should track the trends that are clearly negative sentiment that is highlighting the bearish bias that is slowly and steadily taking a grip on the sentiment. Momentums on hourly charts are indicating that the prices are under pressure as a resumption of selling pressure has intensified. With the continued gradual and hesitant rise emerging from lower levels, we can expect the rise to attract selling pressure.

Trends remain pressured and rallies remain a grey area to sell into. As overseas cues remain under pressure one should look at stock-specific action as there are opportunities available to look at the potential ways to take advantage at the sentiment.

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.