Buy or sell stocks: Raja Venkatraman recommends three stocks today — 13 February

With broader indices remaining negative, certain factors continue to influence the trend. Consequently, it’s crucial to reassess our market participation strategy for this series. Recent dips occurred quickly, as these levels faced significant selling interest, effectively suppressing any bullish momentum.

Outlook for trading

The trading pathway was mentioned yesterday, calling for a shift in guard advocating a ‘sell on rally’ to be adopted. This could continue to be the scenario as the trends have remained suppressed.

The daily chart shown last week continues to indicate that Nifty remains under fire as bears are able to assert their authority. With a change in guard, we continue to maintain any intraday rally towards the 23200 as a selling zone. Until the trendline zone marked on the charts is given up, we can experience some bearish drive. Going by the trends, we should now look at some stock-specific action to persist for the coming week. The higher levels present a selling opportunity but the trends will not be linear.

While the broader indices are looking to make a heavy impact on the present situation, we need to look at the midcap index, which is witnessing a sharp selloff and is generating some selling interest in high-beta midcap names.

With few more days to go for expiry and no visible clarity of an upside one can look at the option data around 23200 as a ‘max pain point’, indicating that the trend ahead will be challenging. Also, the ‘put call ratio’ (PCR) is at 0.63, considering that the overall trends remain stressed and we are heading into an oversold territory. One should look for opportunities to go short.

The absence of clarity in Nifty had induced a bearish bias that eventually led to the testing of much-touted supports around 22800. Despite few stocks showing signs of bullishness, impact on market continues to be tentative.

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

• Delhivery: Sell below ₹274, stop ₹281, target ₹250

This counter has a stretch of long body candle that is seeing a fall with volume, and the breach of threshold at 320 levels has attracted more decline. Surprisingly, despite encouraging Q3 results, the trends could not hold back the consistent decline. The bears took fair advantage in this declining market. With a long body candle highlighting a strong breakdown we can look at some more bearishness. Relative strength index (RSI) below 30 indicates,the trends could dip lower.

• Greaves Cotton: Buy above ₹280, stop ₹273 target ₹305

There has been some steady newsflow surrounding this stock that is aiding the prices in holding back the serious decline across the board in the mid and small-caps. Now, the prices have managed to revive on Wednesday, and the RSI shows that along with the support, the momentum is also showing a reversal from the neutral zone. Hence, it would be a good time to consider that the possibility of a rise is in store.

• Bharat Forge: Sell below ₹1,090, stop ₹1,110, target ₹1,025

Auto stocks faced the heat but could not withstand the pressure, and the recent fall in volumes spelt out more fall ahead. The long body scandal shown at the end of the decline on Tuesday highlights the underlying bearish momentum. As the attempt to move lower attracts more participation, the long body candle presents a strong case of bearishness. The RSI has slipped further below 30 levels, which tells us there is room for further downside.

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.

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