Stock market recap: Indian equities ended lower on Monday, 5 January, despite positive global cues as investors booked profits in select heavyweights amid increased geopolitical tensions after the US military action in Venezuela, capturing Venezuelan President Nicolas Maduro and his wife.
However, the US attacks on Venezuela did not deal any significant blow to global markets. In Asia, Japan's Nikkei and Korea's Kospi jumped over 3% each, while China's Shanghai Composite rose by over 1%. In Europe, Germany's DAX rose by over a per cent. The UK's FTSE and France's CAC 40 were in the green when the Sensex closed.
The Sensex fell 322 points, or 0.38%, to end at 85,439.62, while the Nifty 50 ended at 26,250.30, down 78 points, or 0.30%. The mid and small-cap indices outperformed; the BSE Midcap index inched up by 0.05% and the Smallcap index rose by 0.07%
Best stocks to buy on 6 January as recommended by Raja Venkatraman of NeoTrader.
(All Buy trades are rates of Equity & Sell rates are based on F&O)
SAIL: Buy above ₹151, stop ₹146.50 target ₹161 (Multiday)
VOLTAS: Buy above ₹1480, stop ₹1450 target ₹1540 (Multiday)
SBILIFE: Buy above ₹2080, stop ₹2050 target ₹2130 (Intraday)
Stock market recap
On 5 January, Indian equities opened the week on a buoyant note, with the Nifty scaling a fresh peak of 26,373.20 in early trade. The momentum, however, proved short-lived as the index slipped into a rangebound phase during the first half of the session. Geopolitical concerns stemming from heightened US-Venezuela tensions triggered broad-based selling in the latter half, pulling the Nifty down to 26,250 and leaving it near the day’s low at close.
The Sensex mirrored this weakness, shedding 322.39 points or 0.38 percent to settle at 85,439.62, while the Nifty lost 78.25 points or 0.30 percent to finish at 26,250.30. In the broader market, the Nifty Midcap index briefly touched a record high of 61,520.60 before ending marginally lower, whereas the Nifty Smallcap index managed a 0.5 percent gain. The Nifty Bank also hit a new intraday high of 60,437.35 but held firm above the 60,000 mark despite late selling.
Outlook for trading
Moving to the charts we note that the Pitchfork resistance area around the median line mentioned yesterday continues to halt the trends have been largely oriented towards multiday trading. Overall from a trading perspective we can note that on the intraday charts the value area support area around 26200 came under the spotlight. The support at this region could now play a role in helping the prices revive higher.
The trend that is emerging clearly suggests that the rally seen last week was seen holding above 26000 while supply at the median line could induce profit booking ahead of the expiry. After a positive opening 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 up-move above 25200 (Nifty Spot) would extend the bullish bias. Momentums on intraday charts are indicating that the prices after settling down seems to have absorbed the selling pressure. With the gradual rise emerging from lower levels, we can expect the rise to remain hesitant as bullish bias still continues.
Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:
SAIL (current market price 151.10) - Buy above ₹151, stop loss ₹146.50, target price ₹161 (Multiday)
- Why it’s recommended: Steel Authority of India Ltd (SAIL) is a major Indian government-owned Maharatna company, operating integrated and special steel plants across the country. A double bottom formation seen over the last few weeks was seen getting resolved as some strong trended action is emerged on Friday in an upward charge. Strong breakout beyond TS and KS on Daily charts is fueling a new move.
- Key metrics:
- P/E Ratio : 25.79
- 52-week high: ₹149.40,
- Volume: 25.35M
- Technical analysis: Support at ₹141, resistance at ₹165.
- Risk factors: High dependence on the cyclical steel industry and single-product focus, Lock-in Periods and liquidity risk.
- Buy : above ₹151.
- Stop loss: ₹146.50.
- Target price: ₹161(1 Month)
VOLTAS (current market price 1476.80) - Buy above ₹1480, stop loss ₹1450, target price ₹1540 (Multiday)
- Why it’s recommended: Voltas Ltd is an Indian multinational home appliance part of the Tata Group. The stock had been moving in a tight range between 1440 and 1320 for last 2 months. A strong long body candle breakout seen on Monday 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: 90.58,
- 52-week high: ₹1832.35,
- Volume: 1.59M.
- Technical analysis: Support at ₹1450, resistance at ₹1650.
- Risk factors: Climatic volatility, intense competition, project execution challenges, and margin pressures.
- Buy : above ₹1480.
- Stop loss: ₹1450.
- Target price: ₹1540(1 Month)
SBILIFE (current market price 2075.60) - Buy above ₹2080, stop loss ₹2050, target price ₹2130 (Intraday)
- Why it’s recommended: SBI Life Insurance Co. Ltd (SBILIFE) is one of India’s leading private life insurance providers. SBILIFE maintains its position as a major player in the Indian insurance sector, leveraging the extensive brand trust of its parent, the State Bank of India. Post some long period of consolidation at the TS & KS bands a sharp rise seen in the last few trading sessions highlights more upward possibility. The strong charge seen alongwith some rise positive DI, we can look at possibility of more upward traction.
- Key metrics:
- P/E Ratio: 84.94
- 52-week high: ₹2085
- Volume: 788.14K.
- Technical analysis: Support at ₹2025, resistance at ₹2180.
- Risk factors: Insurance-specific risks, market and economic risks, operational challenges, and regulatory/legal risks.
- Buy : above ₹2080.
- Stop loss: ₹2050.
- Target price: ₹2130.
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.