Stock to buy for 10 February: Raja Venkatraman recommends these three stocks
Summary
- Here are three stocks to buy as recommended by Raja Venkatraman of NeoTrader for Monday, 10 February.
Stock markets on 7 February
On Friday, the much-awaited Reserve Bank of India (RBI) policy did not significantly impact the trends. RBI cut repo rate by 25 basis points (bps) to 6.25%, marking the first rate reduction in nearly five years. Despite this policy shift, the benchmark indices remained flat, with the Nifty declining 0.18% and the Sensex falling 0.25%. The rate cut was largely priced in by the markets. We have been mentioning that a “sell on rally approach" needs to be considered since we are looking at the need to factor that in an event-driven week, the possibility of a trend to sustain becomes difficult. The trends followed suit.
Outlook for trading
The inability to retain the bullish resolve is now hurting Nifty and acting as an impediment to sustaining the strong upward drive. The volatile scenario continues to hamper the trends as they are currently taking a breather in the recent moves. The sudden intraday collapse is attracting some bearishness. Currently, overall momentum and sentiment are buoyant, but the unexpected stretch of positive vibe has begun attracting some hesitation. The inability of macro news triggers to generate some momentum in the broader indices over the last three days has seen indices retrace and has led to some stock-specific action. However, the bullish camp has revived the bullish bias despite the minor hiccups.
However, looking at the weekly timeframe, we can conclude that the dip into the important support region that we observed at around 23500 was tested and revived quite swiftly. Hence, going into the next week, the trends will remain upwardly poised with an eye on 23500 as a support zone and 23800 is the resistance zone for the day. Since the supports are still intact, we should continue to maintain a buy-on-dip strategy. Also, the ‘open interest’ data shows a lot of ‘put writing’ around 23500 levels supporting the bullish cause, as this level will not be given up easily.
Currently, the trends have remained mixed as the pption data suggests that PCR is at 0.60, highlighting that the trends are witnessing sell-off at every rise. We may not start the week on an encouraging note. Bank Nifty shall be under the spotlight as RBI initiatives could not set off encouraging triggers as anticipated.
Also Read: FPIs double down on Nifty option sales ahead of MPC meeting outcome
Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:
• Southern Petrochemical Industries: Buy current market price and at dips to ₹80.5, stop ₹79.80, target ₹90
This chemical stock, after undergoing a lot of pain, has shown a strong breakout as buying momentum got built. After biding some time and absorbing the volatility, we can look at the prices looking to extend next week. The steady upward bounce has pushed the RSI above 60, highlighting the bullish possibility.
• Strides Pharma: Buy above ₹750, stop ₹733 target ₹825
This counter is showing some steady upward bias after crossing the ‘kumo’ region around 725 levels in the last week, highlighting some steady resolve on the way up. A long body candle formed in the last trading sessions highlights continued positive sentiment. With momentum crossing important threshold one could consider going long.
• PVR Inox: Sell below ₹1080, stop ₹1105, target ₹1040
Media stocks are under pressure, and the fall seen in the last session indicates that the bearish pressure could extend. The gradual resumption of downward pressure suggests that there is more decline possible. The attempt to move beneath the consolidation zone presents a strong case of bearishness. As Relative Strength Index (RSI) is seen breaching 40 levels again we can look to trade short in this counter.
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.
Also Read: Buying the dip? These five fundamentally strong stocks are down as much as 50% from 52-week highs.
