Stock recommendations: Raja Venkatraman picks these three stocks for 4 February
Nifty 50 on 3 February: Recap
On 3 February, Trump triggered a worldwide panic, and the knee-jerk reaction caught traders as well as investors by surprise before they got positive about the Budget cues. We had mentioned recently that historically, the last three budgets have resulted in a negative closing, and this came true on Monday as a weak opening set the tone for the big event ahead of the RBI policy at the end of the week.
Looking at the current scenario, it would be prudent to expect a toned-down participation in the days ahead. However, multiple triggers are emerging, and the random events that are triggering the sentiment are pouring cold water on the encouraging vibes that got set off on the Budget day.
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Indian stock markets: Way forward
As the steps ahead are clearly again getting into a tangle, it’s best to reduce participation and await clarity as the broader indices remain pressured. Global cues will try to dictate the trends, and the impact on the currency, as we have discussed earlier, shall play a part in the trends this week. We decided to step on the other side and see what we need to consider now to get our perspective in order. On higher timeframe charts, we observe that dollar-rupee has moved sharply above the consolidation, we are noting a long body candle pattern on the weekly charts that is intending to accentuate the bearish bias. This has created some hesitation; hence, we need to move ahead with some caution as we encounter a tense trading week.
The option data is hinting at 23500, seeing some strong call writing that played a part in holding back the bullish exuberance. As the trends are clearly not stable one needs to watch out for limited action on either side. Despite some patches of positive outlook there was not enough movement witnessed. As the overall bias is still bearish, one witnessed selling pressure emerging at higher levels. The gap regions around 23500 will continue to be the immediate hurdle, with the next one being at 24650. Bank Nifty is recovering from last week’s meltdown and will need more triggers to stage ahead of 50000, which is a value area resistance that continues to remain a hurdle.
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Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:
• TAJ GVK: Buy on dips to above ₹ 398, stop ₹390 target ₹415
The stock has been experiencing a lot of volatility, and the recent profit booking dragged the prices into the ‘kumo’ support region and is now spurring a rebound. The robust long body candles are indicating some positive traction ahead. With the RSI pulling back to the neutral zone and a revival thereafter, it suggests we can look at some long opportunities. Consider going long.
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• Greaves Cotton: Buy above ₹ 285, stop ₹269 target ₹340
This counter continues to rebound from support in the last two months and is now showing some steady rise at the Kumo cloud, highlighting the continued upward bounce. A long-body candle close on Monday highlights positive sentiment. As the momentum is seen rising above important RSI zones consider going long.
• India Glycols: Buy above ₹1,350, stop ₹1,320, target ₹1,490
We have been mentioning the revival in chemical stocks, and the move seen in the last few days is clearly indicating some more fresh moves to the upside. As RSI is seen gathering steam, one can look to initiate longs. Volumes are also seen picking up, highlighting the possibility of the trends to continue.
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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