Markets
Stock to buy and sell for 12 February: Raja Venkatraman recommends these three stocks
Summary
- Here are three stocks to buy as recommended by Raja Venkatraman of NeoTrader for Tuesday, 12 February.
Stock market today: A recap
India's benchmark stock indices, Sensex and Nifty, tumbled over 1.3% on Tuesday, 11 February, marking their steepest single-day decline in three weeks and extending a five-session losing streak. The selloff was driven by rising trade tensions amid fresh tariffs by US president Donald Trump, persistent foreign fund outflows, and lacklustre corporate earnings.
Globally, investor sentiment remained cautious as Trump’s tariff escalation weighed on equities. Asian markets also struggled, with Hong Kong’s Hang Seng slipping 0.3% and S&P 500 futures down 0.2%. Weak Q3 earnings added to the gloom.
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Among notable earnings disappointments, Eicher Motors plunged 7% after missing profit and margin estimates for Q3 FY25, impacted by higher costs and a decline in high-margin motorcycle sales.
Market outlook for 12 February
On Monday, 10 February, we highlighted that a shift in market sentiment was underway, with significant Call writing around the 23,500 level, signaling mounting pressure that could reinforce bearish momentum. Today, the market is feeling the full impact of FII selling, sharp volatility, and relentless sell-offs, which are beginning to take a toll.
The weakening USD/INR remains a critical factor, prompting a reassessment of our bullish stance. While a likely Reserve Bank of India intervention helped pull the pair down from 87.42 to 86.50, negative global cues could continue to weigh on sentiment.
Given the current trend, the "Buy on Dips" approach is no longer advisable, and a "Sell on Rally" strategy should be prioritized.
Key levels to watch
Max Pain Point: 23,300, which serves as the key inflection level.
Immediate support: 23,000, where strong Put writing indicates attempts at a rebound.
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Resistance: 23,300, as shifting Open Interest from 23,500 to 23,300 suggests that any rally toward this level may face selling pressure, reinforcing bearish momentum.
Options data insights
The Put-Call Ratio (PCR) has dropped to 0.53, indicating extreme pressure and consistent selling on every rise. As the bearish stance strengthens, further declines remain a strong possibility.
Outlook: Expect continued weakness, with global cues and currency movements playing a crucial role in shaping market direction.
Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:
• Deepak Nitrite Ltd: Sell below ₹2,215 | stop loss ₹2,250 | target ₹2,100
This chemical stock has remained under pressure, grappling with high volatility amid a weak Q3 earnings performance. The persistent decline has allowed bears to dominate, further amplifying the stock’s weakness in an already declining market.
The formation of a long-body candle signals a strong breakdown, suggesting the potential for further bearishness. Additionally, the steady decline in the last session has pushed the RSI below 40, reinforcing the likelihood of continued downward momentum.
• VA Tech Wabag Ltd: Buy above ₹1,420 | stop loss ₹1,390 | target ₹1,560
With a positive newsflow about securing a contract from Saudi Arabia and encouraging Q3 results, the profit booking in this counter could come to an end. Overall , there has been some steady buying at lower levels as a hammer bottom was formed at the end of January, highlighting a bottoming formation. The Relative Strength Index (RSI) is seen rising ever since and is now inching higher. The prices are showing intention to step up and can be a good opportunity to go long at current levels.
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• Sun Pharmaceutical Industries Ltd: Sell below ₹1699 | stop ₹1,730 | target ₹1600
Pharma stocks have been under pressure and the fall after a brief rise seen earlier in the month is looking to tread lower. The long body shown at the end of the decline on Tuesday highlights the underlying bearish momentum. As the attempt to move beneath the consolidation zone presents a strong case of bearishness. As RSI is already showing weakness the slip below 40 levels is inviting us to go short in this counter.
Raja Venkatraman is co-founder, NeoTrader.
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.
