F&O Strategy: Buy Kotak Bank, Godfrey Phillips, JSW Steel , suggests Rupak De in a falling stock market today

Stock market today: The domestic benchmark indices, Nifty 50 and Sensex, experienced selling pressure for the fourth straight session on Monday, February 10, as the Sensex dropped by more than 600 points and Nifty 50 approached 23,350 during intraday trading.

The Nifty 50 was down 0.85% at 23,359.60 level as of 12:53 IST, while the Sensex fell 0.85% to 77,195.49.

Analysts have identified five potential reasons for the market decline, including Trump's tariffs, inflated valuations despite recent corrections, ongoing weak earnings impacting market sentiment, persistent outflows of foreign capital, and the depreciation of the rupee.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, emphasized that it is crucial to recognize that valuations in India remain relatively elevated, especially within the broader market.

The market requires fundamental catalysts such as signals indicating GDP growth and a recovery in earnings. Until these factors emerge, the market is expected to fluctuate within a defined range. Investors ought to focus on high-quality large-cap stocks that are fairly valued.

Technical views by Rupak De, Senior Technical Analyst, LKP Securities on F&O market

Nifty 50

The Nifty 50 saw some turbulence after the RBI Governor’s monetary policy announcement. However, despite the fluctuations, it managed to hold above the 21 EMA on the daily chart, keeping the short-term trend positive. As long as it stays above 23,450, the outlook remains bullish. A decisive break below this level could spark some short-term panic, but until then, the trend looks intact.

On the upside, resistance is placed at 23,700, and a strong breakout above this level could open the door for a rally toward 24,050.

Open Interest Analysis: Heavy call writing was observed in Nifty 50 on the first day of the weekly expiry. Significant open interest additions were seen in 23,800 CE and 24,000 CE. On the put side, 23,200 saw a decent rise in open interest. Among the near-the-money options, 23,600 CE had the highest OI concentration, while 23,500 PE recorded the highest OI addition on the lower end.

Strategy: After two three days of contained move, I expect a decent recovery on the upside once the Nifty 50 moves above 23600.

Trade: Buy Nifty 50 13FEB 23700CE ABOVE 110 TGT 170 SL 79.

Technical stock recommendations for the week

Buy Kotak Mahindra Bank Ltd at ₹1,929; Target at ₹2,050; Stop Loss at ₹1,869

Kotak Mahindra Bank has broken out of a falling trendline on the daily chart, signaling increased optimism. Furthermore, it has remained above the 21 EMA on the daily timeframe. The RSI is in a bullish crossover and trending upwards. On the downside, there is strong support at 1,869, and a breach of this level could weaken the stock. On the upside, the stock has the potential to reach 2,050.

Buy Godfrey Phillips India Ltd at ₹5,470; Target at ₹6,000; Stop Loss at ₹5,239

Godfrey Phillips has shown a consolidation breakout on the daily chart, suggesting growing optimism. Additionally, it has sustained above both the 21 EMA and 50 EMA on the daily timeframe. The RSI is in a bullish crossover and trending upwards. On the upside, the stock has the potential to rise towards 6,000. On the downside, strong support is at 5,239, and a break below this level could lead to a weakening of the stock.

Buy JSW Steel Ltd at ₹980; Target at ₹1,020; Stop Loss at ₹959

JSW Steel has given a consolidation breakout on the daily chart, indicating increased optimism. It has also remained above key short-term moving averages on the daily timeframe, reinforcing the bullish trend. The RSI is in a bullish crossover and trending upwards. On the upside, the stock has the potential to move towards 1,020. On the downside, there is strong support at 959, and a break below this level could weaken the stock.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.