Stocks to buy or sell: Raja Venkatraman recommends three stocks for 21 February

In corporate news, Waaree Energies saw its shares jump nearly 3% after securing a significant 362.5 MWp solar module order. Meanwhile, Cyient’s shares rallied 4% following the appointment of a new CEO for its DET Business. BSE shares also rose nearly 2% after Goldman Sachs acquired shares worth ₹401 crore. On the global front, Trump’s tariff worries kept gold near record-high levels, while Asian stocks dropped after the Fed minutes showed caution .

Outlook for trading

The market did its best over the last three days but has not managed to survive critical support. However, the trends have arrested any kind of selling pressure that emerged, thus indicating that the overall markets continue to remain positive. A long body candle on Wednesday highlights the sharp movement that we witnessed in Nifty, clearly aimed to erase the nervousness that had been holding back the revival.

Aftersome volatile movements, the Nifty managed to give a better closing. Important support to watch out for is a range that is getting built based on the option data between 22900 and 23000, hinting at some strong put writing emerging. Based on put-call-ratio data, the negative bias is not ruled out yet, and the short-covering action that may follow based on global cues could help the market rise rapidly.

As a rebound is being attempted, the resistances continues to remain at 23200 with the max pain point at 23000 continuing to be a stumbling block. The levels around 23200 would be the next hurdle the index should attempt to conquer on the way up.

Also Read: While the big bulls have moved on, retail investors are stuck holding the debris

We have been witnessing some consolidation at lower levels, and the range-bound action that is getting created has pushed Nifty into a tight range. A move above this area is needed; hence, it would be a testing phase for the trends ahead. As some heavy put writing has emerged at 22800, like we had mentioned yesterday, they have now moved to 22900, thus calling for a possibility of a trended action today. The put call ratio (PCR) also has moved slightly above 1 in Nifty and BankNifty, giving a sense of comfort and confidence to the bullish camp.

Currently the ADX/DMI (average directional index/directional movement index) remains sedate and the small body green candle formation at the 22800 levels are indicating possibility that the bearishness is seen receding. While evidence is taking time to establish their presence, small measures seem to be underway. As we are trading into the last trading day of the week, we can see from the chart below that a reaction from here could carry the prices higher. However, we still have to figure out the way ahead and bide our time, as the last few sessions have been quite range-bound.

Also read | Market correction or full-blown bear hug? Investors brace for uncertainty

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

• Nucleus Software Exports: Buy above ₹880, stop ₹855, target ₹980

This software counter has been making a base, and the infusion of some newfound momentum indicates that a revival is emerging after a while. Thursday’s action highlights that the rise in prices of this counter has been quite steady, and a volume-led rise could now result in some revival. The relative strength index (RSI) showing some positive divergence indicates that the trends are in a revival mode and could set some pace to the upside.

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• Healthcare Global Enterprises: Buy above ₹510, stop ₹495, target ₹555

After the prices dipped into the moving average bands are seen holding out the bearish tones and the momentum readings are seen producing a rebound from lower levels. That could help the prices rise quickly. As trends are looking promising with formation of a long body candle, one can look to go long for the next few days.

• Wockhardt: Buy at ₹1,390, stop ₹1,365 target ₹1,510

Wockhardt, after the recent correction, has displayed some renewed enthusiasm as the supports offered by the moving average bands clearly spell out that the trends are showing some revival again. With a possibility of some upward bounce emerging, one can consider going long in this stock as there is more room for upside.

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.