Market recap: Nifty 50 on 5 March
On 5 March, the markets rebounded sharply with the Nifty 50 and the Sensex both gaining around 1%, snapping a 10-day losing streak for the Nifty 50. Sectors like IT, metals, and auto drove the recovery, though analysts remain cautious due to global uncertainties like trade wars.
The recovery was led by gains in technology, metal, and automobile stocks, which outperformed despite some weaknesses in select major stocks. Still, analysts remain wary about how sustainable this bounce will be, as ongoing global uncertainties, such as trade war tensions, continue to cast a shadow over financial markets.
By the session’s close, the Sensex surged 740.30 points to 73,730.23, and the Nifty rose by 254.65 points to 22,337.30, with market breadth favouring gainers over losers.
Indian stock markets: Way forward
The Nifty Bank has been weaker in comparison, and the sustained bearish pressure seen on every rally indicates that it is inclined to some downward bias as the trends are unable to head higher. HDFC Bank has been under a great deal of stress, and despite some decent numbers, the stock could not impact the market condition.
As we have been discussing, the trends were expected to head into the upper end of the value resistance zone as the indicators were tiring out. The rise witnessed in the Nifty Bank has suddenly taken a U-turn and it is attempting to hold on to the bearish pressure that is emerging at higher levels. However, due to the lack of triggers, we are witnessing a ranging action that could keep the trends from recovering swiftly.
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Today, we will take a look at the Nifty Bank, where more bearishness can seep in once 48,000 is given away, till then, bulls will attempt to rebound. The Nifty Bank is a sector that could be avoided for the moment, and instead, we could look at stock-specific action where divergent views have been displayed across all the component stocks. PSU Banks are having it rough and the continued positive vibes being exhibited shall make it difficult for the Nifty Bank to recover. This, in turn, will spill over to the other sectors like auto, realty and finance.
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As markets on Wednesday showed some prowess of a recovery, the inability of the Nifty Bank to clear the 50,000 mark seems limited. Hopes rest on ICICI Bank and HDFC Bank. Until then, this index holds the key for some trends to emerge.
Three stocks to buy, recommended by NeoTrader’s Raja Venkatraman:
• Yuken India Ltd: Buy above ₹785 | Stop loss ₹763 | Target ₹885
The capital goods sector is going through a rough patch, but this counter has been able to show some resolve and head higher. The reaction from lower levels is now showing a resumption in the bullishness as this stock is showing some signs of bottoming out with some steady buying at lower levels thus highlighting the genuine buying emerging. Post a reaction from higher levels the stock is finding buyers.
• Gulf Oil Lubricants India Ltd: Buy above ₹1,190 | Stop loss ₹1,165 | Target ₹1295-1325
After forming a strong base at lower support levels, strong push seen on Wednesday resulted in breach of important resistance of the MA Bands. A strong long body green candle that is playing out is inviting more buying into the system. With RSI heading higher the bullishness seen could persist, indicating that we should be looking at some potential ascent in the coming sessions.
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• LT Foods Ltd: Buy above ₹338 | Stop loss ₹330 | Target ₹355-368
LTFOODS, an aggressive player in the rice exports segment, has been undergoing some volatile scenario in the last few days. The positive move seen on Wednesday highlights that there is a shift seen in the counter, and the trends are hinting at some bullish bias. The momentum is slowly inching higher indicating that the bullish bias can extend.
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.
