Stock market: Volatility prevailed and trends suppressed any kind of recovery that was witnessed in Indian stock markets on Thursday, 4 December. The Sensex expiry witnessed strong trended action in certain select stocks that continued to keep the bullish hopes alive.
With markets opening up, expect trends to resume bullishness.
Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:
KPIT Tech (current market price ₹1269.80) - Buy above ₹1272, stop loss ₹1245, target price ₹1350 (Multiday)
- Why it’s recommended: KPIT Technologies Ltd is a global technology company specializing in embedded software and digital solutions for the automotive and mobility sector. Founded in 1986, the company is headquartered in Delhi NCR and is the largest producer of structural steel tubes in India. After some recent reaction and dip down into the Kumo cloud region, a strong run in metal sector has generated buying interest. While momentum did take a breather the metal sector is back in action and this stock is showing some strong moves. Consider going long.
- Key metrics:
- P/E: 58.81,
- 52-week high: ₹1562.90,
- Volume: 828.12K.
- Technical analysis: Support at ₹1220, resistance at ₹1400.
- Risk factors: Cyclical and rapidly evolving global automotive industry, client concentration, and intense market competition.
- Buy : above ₹1272.
- Stop loss: ₹1245.
- Target price: ₹1350 in 2 months.
IndusInd Bank (current market price ₹863) - Buy above ₹865, stop loss ₹848, target price ₹895 (Intraday)
- Why it’s recommended: IndusInd Bank is a private sector bank that offers a wide range of consumer and corporate banking services. With Bank Nifty showing strength, we can observe that the last few days the counter after the consolidation at the TS line has shown some strength. Also, the ADX is seen holding and a fresh uptick in momentum is witnessing an upward charge that can help the trends sustain and move ahead.
- Key metrics:
- 52-week high: ₹1086.50,
- Volume: 474.60K.
- Technical analysis: Support at ₹821, resistance at ₹925.
- Risk factors: Derivative accounting discrepancies, lack of transparency and intense competition from larger banks.
- Buy : above ₹865.
- Stop loss: ₹848.
- Target price: ₹895.
KEI Industries (current markrt price ₹4185.10) - Buy above ₹4190, stop loss ₹4130, target price ₹4275 (Intraday)
- Why it’s recommended: KEI Industries Ltd (KEI) is a premier Indian manufacturer and supplier of wires and cables, established in 1968. It is a leading player in the domestic market and has a significant global presence, serving clients in over 60 countries. After some recent reaction and dip down into the TS & KS bands have once again seen buying interest stepping in. While momentum did take a breather the metal sector is back in action and this stock is showing some strong moves. Consider going long.
- Key metrics:
- P/E: 50.71,
- 52-week high: ₹4699,
- Volume: 143.91K.
- Technical analysis: Support at ₹4050, resistance at ₹4400.
- Risk factors: Raw material price volatility, working capital management, and potential project delays in its capital expansion plans.
- Buy : above ₹4190.
- Stop loss: ₹4130.
- Target price: ₹4275.
Stock Market Today
The equity benchmarks pared some gains in a volatile Thursday session as profit booking trimmed intraday advances, with the Sensex retreating roughly 200 points from its peak and the Nifty slipping below 26,050.
The Sensex began weak, down 156.83 points at 84,949.98, while the Nifty eased about 47 points to 25,938.95. Both indices later recovered, the Sensex climbing as high as 85,476.62 — a gain of 369.80 points from the open — and the Nifty rising to 26,096.25, up 110.25 points.
Profit booking, however, pushed the close lower. The Sensex finished 158.51 points, or 0.19%, higher at 85,265.32, and the Nifty settled at 26,033.75, up 47.75 points or 0.18%.
Among Nifty50 stocks, InterGlobe Aviation, promoter of IndiGo, Dr. Reddy’s and Kotak Mahindra Bank were notable laggards, falling up to 2%, while TCS and Tech Mahindra led gains with a near 2% rise each. Market breadth was negative, with 1,765 advancers, 1,848 decliners, 151 unchanged.
Outlook for Trading
Choppy markets always push us to evaluate new scenarios. Last week we saw the markets continue to move higher but the constant volatile nature of the market forced us to look at every sector only for a limited timeframe. The strong sector rotation that emerges lead to some stock specific action which demanded that all were clear about what’s happening.
Earnings season is keeping market participants busy.
It was more of the same during yesterday'ssession, as the Nifty revived swiftly from lower levels as the supports highlighted yesterday came to our rescue. continued to push up to fresh new highs. Every target that everyone has made for the Nifty has been taken down by the index and now the new calls for a move to cross 25500 levels have started surfacing.
People are now a lot more optimistic about what lies ahead and everyone has revised their Nifty earnings figures higher. Sometimes one feels that the revisions are a shade too optimistic. It is actually thus every year- Q2 forecasts about the earnings growth are expected to resume now as the news unfolds, the projection remains subdued.
An interesting feature we observe on the intraday charts were that around 10.15 am there has been a halt in the trend seen in morning. As you step into a higher timeframe, we note that the charts shown below are clearly demonstrating that the overall sentiment remains confused.
With the Max Pain remaining at 26000 we can definitely note the challenge the market is facing at the moment. As RBI policy verdict gaining momentum once again, we can look towards the trends getting clouded amid a sharp fall in the Indian rupee against the US dollar. As market gets selective in the movement, we are having to deal with sector rotation that will continue to experience this movement. The trade mentioned yesterday continues to hold its way despite the large-scale intraday volatility that we care from some upside towards the recent highs.
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.