Stocks to buy or sell for short-term: Jay Thakkar of ICICI Sec suggests these three shares in F&O segment

Stock Market News: The domestic benchmark indices, Nifty 50 and Sensex, faced downward pressure on Friday as both indices began the day lower, continuing their negative streak in line with their Asian counterparts, amid worries about a potential global trade war.

Compounding the market decline were persistent outflows from foreign portfolio investors (FPIs), underwhelming earnings reports, and fears of an economic slowdown. While foreign investors have been pulling their funds out, domestic investors have been consistently putting their money in. In early trading session, the Sensex plummeted by 790.87 points to 73,821.56, while the Nifty 50 dropped 231.15 points to 22,313.90.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, has indicated that March is expected to see a recovery in the Indian market, driven by improved macroeconomic news and reduced foreign institutional investor (FII) selling. He noted that large-cap valuations are generally fair and sometimes attractive, suggesting that FIIs are not likely to increase their selling pressure as they have in previous months.

Market Outlook by Jay Thakkar, Vice President & Head of Derivatives and Quant Research, ICICI Securities

Nifty 50 has closed absolutely on the monthly F&O settlement day even after hitting one year low on IVs with IVP and IVR going to 0, the Index didn’t give a major move on either direction. The Index closed 2.96% lower from its last expiry and with that it has closed in the negative territory for the 5th consecutive month.

Historically, the Index has never closed in the negative territory for the 6 consecutive expiries, so there is a higher chance that the March series ends with a positive note and closes above 22,545 levels. On the upside 22,600 is the immediate resistance as that’s the max pain level as well the highest call OI for the next weekly expiry is at 22,600 at present.

On the lower side, 22,500 is an immediate support, hence the range is of 100 points which is quite narrow, hence a breakout on either side will lead to a good directional move, if the breakout happens on the upside then it is expected to continue based on short covering, whereas, if the breakout happens on the lower side then the support is at 22,000 levels and then market should bounce back based on the historical data which indicates that March series should close on a positive note.

Stocks To Buy in the near-term – Jay Thakkar

Jay Thakkar of ICICI Securities recommends buying Bajaj Finance March Futures, Chambal Fertilizer March Futures, and Nestle March Futures.

Buy Bajaj Finance March Futures at CMP: ₹8,662; Stop Loss ₹8,490; Targets: ₹8,950 and ₹9,100

Bajaj Finance has witnessed long additions in futures and the OI in futures has hit the life time high with the price rising which is a positive sign going forward. The cumulative OI chart had provided a breakout from a symmetrical triangular pattern which it retested and has started to rise again. As per the March options data, the highest call OI is at 9000 strike which is the nearest resistance, hence the target on the upside is 8950 and the highest put OI is at 8500 strike which is the immediate support and it coincides with the max pain level which is also 8500, hence 8500 is the very important near-term support.

Buy Chambal Fertilizer March Futures at ₹550; Stop Loss ₹530; Targets: ₹580 and ₹590

Chambal Fertilizer has provided a fresh breakout with increase in OI indicating long built up. The entire consolidation or price wise correction has happened on long unwinding and now with the upward breakout the OI is rising from its lower level indicating significant upside potential. As per the options data, the next resistance is at 600 as it has the highest call OI whereas 530 is a critical short-term support. The Index is trading at its max pain level of 550 and it’s in discount of 28 points to cash levels.

Buy Nestle March Futures at CMP: ₹2,287; Stop Loss ₹2,220; Targets: ₹2,380 and ₹2,420

Nestle is one of the leading contenders for the short covering in the March series. The stock has witnessed huge short built up wherein the OI is at its life time high and despite that the stock prices has paused to correct instead it has started to move higher and its not forming fresh lows indicating that the further upmove will trigger short covering which will help the stock price to move up sharply. The momentum indicator both the leading as well as lagging indicators are in buy mode on the daily as well as weekly charts. The options data suggests that 2,300 is the nearest resistance as that has the highest call OI which when taken off it will lead to further upward momentum. The stock is already trading above its max pain of 2,280, hence its positive.

Disclaimer: The Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 27/02/2025 or have no other financial interest and do not have any material conflict of interest.

The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.