Stock market recap: The Indian equity markets closed on a weak note on Tuesday. The Sensex slipped 376 points to settle at 85,063, while the Nifty declined 72 points to 26,179. Market breadth remained negative with an advance-decline ratio of 2:3, reflecting broad-based weakness.
Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:
MARICO (Cmp ₹779.05)
- Why it’s recommended: Marico is a leading Indian multinational consumer goods company headquartered in Mumbai, specializing in global beauty and wellness. After ranging for the last 6 months the strong upmove seen in the last few days have been encouraging. The trends that has emerged as this week began highlights a strong bullish possibility. Robust moves beyond TS and KS on Daily charts is fueling a new upward possibility.
- Key metrics:
- P/E Ratio : 53.94
- 52-week high: ₹775.55,
- Volume: 1.89M
- Technical analysis: Support at ₹720, resistance at ₹865.
- Risk factors: Changing consumer preferences, competition, Commodity price volatility, and interest rates
- Buy: above ₹780.
- Stop loss: ₹755.
- Target price: ₹825(1 Month)
DIVISLAB (Cmp ₹6,642.50)
- Why it’s recommended: Divi's Laboratories Ltd. is an Indian multinational pharmaceutical company and one of the world's top manufacturers of Active Pharmaceutical Ingredients (APIs), intermediates, and nutraceutical ingredients. A strong long body candle breakout seen on Tuesday has now opened a new trend possibility. A sharp rise in the ADX and DI indicates that we can look to initiate a long opportunity here for a push to higher levels. Go long now.
- Key metrics:
- P/E: 70.14,
- 52-week high: ₹7,071.50,
- Volume: 732.44K.
- Technical analysis: Support at ₹6250, resistance at ₹6900.
- Risk factors: Climatic volatility, intense competition, project execution challenges, and margin pressures.
- Buy : above ₹6,650.
- Stop loss: ₹6,550.
- Target price: ₹6,950(1 Month)
PNBHOUSING (Cmp ₹1,007.85)
- Why it’s recommended: PNB Housing Finance Limited (PNB Housing) is a prominent Indian housing finance company promoted by Punjab National Bank (PNB). It is registered with the National Housing Bank (NHB) and offers a variety of home loan and financial products to individuals and corporate bodies. Post some strong upmove the prices are seen taking a breather. With the momentum holding steady in the last few trading sessions the possibility of more upward traction has emerged. ADX is also seen charging higher hence we can look at possibility of more upward traction.
- Key metrics:
- P/E Ratio: 11.95
- 52-week high: ₹1,141.90
- Volume: 1.01M.
- Technical analysis: Support at ₹947, resistance at ₹1050.
- Risk factors: Insurance-specific risks, market and economic risks, operational challenges, and regulatory/legal risks.
- Buy : above ₹1,010.
- Stop loss: ₹995.
- Target price: ₹1,040.
Stock Market Recap
On Tuesday, the Indian equity markets closed on a weak note. The Sensex slipped 376 points to settle at 85,063, while the Nifty declined 72 points to 26,179. Market breadth remained negative with an advance-decline ratio of 2:3, reflecting broad-based weakness.
The midcap index also fell 117 points to 61,149, though the Nifty Bank outperformed, gaining 74 points to close at 60,118. Reliance Industries registered its sharpest single-day fall in ten months, weighing heavily on the indices, while Trent tumbled 8% on disappointing Q2 revenue growth.
ITC extended losses, hitting a two-year low, whereas insurance stocks gained ahead of monthly data, with HDFC Life among the top performers. Kotak Mahindra Bank ended 2% lower despite healthy quarterly numbers. Metal counters like NALCO and Hindalco advanced, while IEX surged 9% on positive developments in the market coupling case. Select pharma and tech names such as Divi’s Labs and Emmvee rose 5–8%, but EMS and renewable energy stocks faced selling pressure.
Outlook for trading
As the market remains muted, triggered by the geopolitical tensions, it tested our patience on Tuesday, but did not give up the lower levels. The last one month, the 1000-point range could now limit our expectations in the January series. However, the trend seen over the last few days highlights that the Nifty is witnessing some profit-taking.
On the charts, we note that the fall below the lower end of the channel is creating pressure on the overall trends.
Taking some cues from the Option data, we can add that the levels around 26000 that had steady Put writers have now ensured that the upward possibility gets more wings. With the PCR nearing 0.91 we can expect some trended move today. Stay alert.
The trend that is emerging clearly suggests that the dips seen last week managed to hold the support zone and the gap down opening was covered to ensure that the prices traded above the range area that developed in the last few days. Hence, one should track the trends that are in progress as upmove needs to continue their way above 26200 (Nifty Spot)to renew the bullish bias.
Momentum on hourly charts are indicating that the prices have reached important supports and after settling down seems to have witnessed a resumption of selling pressure. With the consolidation in progress and the trends remaining unclear, we can expect the rise to remain limited.
For undertaking shorts, we need to see Nifty move above 2590,0 which is the immediate support as per the Open Interest data. If we witness a 30-minute range breakout on Wednesday, we can consider trading on either side as the trends still remain tentative, where we expect some resistance to kick in.
While the trends in the indices are still unclear there is plenty of action as far as the stocks are concerned.
We continue to maintain long positions in the Nifty so long as 26000 holds, viewing any sustained move below that level as a clear sign that bullish conviction is waning. The resistances have now moved from 26400 to 26250, while open interest shows that the road ahead is more open.
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.