Stock market update – 10 March
Indian stock markets fell on Monday due to various global and domestic factors. The Sensex dropped over 700 points from its intraday high to close 217 points lower at 74,115.17. The Nifty fell below the 22,500 mark, ending the day at 22,460.30, down 92 points.
The selloff was attributed to weak cues from global markets, including a significant decline in US stock futures, concerns over trade tensions, and upcoming economic indicators like inflation data from the US and India. US President Donald Trump’s remarks on economic “transition” and the announcement of tariffs on steel and aluminum imports added to market jitters, raising fears of reciprocal measures on Indian exports.
Outlook for trading
Moving to the charts, we note that the trends have been largely oriented towards trading rather than investing. Hence, from a trading perspective, we can note that on the hourly charts, the gap area around 22800, combined with the 38.2% Fibonacci resistance trendline, has curtailed the prices. The sharp rally that we witnessed last week is now facing challenges to stage a further up move.
The emerging trend suggests that the rally seen last week was a relief rally that retraced one-third of the fall seen since February highs. Hence, one should track the trends that are in progress, as the upmove needs to continue above 22800 to reinstate the bullish bias. Momentums on hourly charts indicate that the prices, after settling down, seem to have witnessed a resumption of selling pressure. With the gradual and hesitant rise emerging from lower levels, we can expect the rise to remain hesitant.
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For undertaking shorts, we need to see Nifty move below 22500 for a drop once again to 22200 and 22000 as per the open interest data 22200, where we see the next set of supports emerging. If we witness a 30-minute range breakout on Tuesday, we can consider trading on either side as the trends still remain tentative where we expect some resistance to kick in. As a ranging market is in play, we need to be quick in profit taking as the trend does not have sufficient steam to move strongly in either direction.
The readings from the option data suggests that PCR has moved to 0.89, highlighting that the trends are at an important stage with some steady Call writing at 22700 levels continues to prove to be a hurdle for recovery levels fighting the buying interest at every rise.
At this juncture we have to pay attention to multiple news triggers. The combination of global tariff threats, cautious investor sentiment, and domestic economic challenges contributed to the sharp market decline and volatility in the rupee.
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Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:
• Godrej Industries: Buy above ₹1155, stop ₹1135 target ₹1255-1265
After undergoing a lot of volatility and the Q3 results, this stock was found stable. The bears’ inability to drag it lower in this uncertain market speaks well for a strong rounding pattern breakout amid buying momentum. After absorbing the volatility, we can look at the prices for extending next week. The steady upward bounce has pushed the ADX DMI into a buying mode, indicating the trends could push the prices higher.
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• Sarda Energy & Minerals: Buy above ₹504, stop ₹473 target ₹530-540
There has been some steady buying at moving average bands as the momentum tried to revive the prices from lower levels. With the cloud region offering some upward thrust, the possibility of the counter showing a bullish bias has gone up. Now, with the steady upward bias in the last few days, the dip into the moving average bands attracting some buying interest in the last week highlights some steady resolve on the way up.
• Hindustan Unilever: Buy above ₹2,250, stop ₹2,210, target ₹2,450-2,500
FMCG stocks were under pressure and post the fall seen in the last few weeks a rebound is expected. The recovery witnessed indicates that the bullish momentum could extend. The long body shown at the end of the last rise on Monday suggests that there is a further rise. The attempt to move higher post the consolidation presents a strong case of bullishness. As relative strength index (RSI) is already showing rebound from oversold levels , we can look to trade long in this counter.
Also Read: This smallcap pipe stock is down 61% in last one year. Can Q4 spark a comeback?
Raja Venkatraman is co-founder, NeoTrader. His registration number is INH000016223.
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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.
