Stocks to buy: HDFC Life, Coal India among top money-making stocks; Nifty resistance at 18500-18550 By Shrikant Chouhan On Tuesday, the market finally came down with the support of the broader market. The sectors other than technology closed in the negative territory. The Nifty 50 index was at 18604, however, it closed at 18419 at the lowest point of the day. On a daily basis, the market closed at the lowest level of the previous day after a continuous run of nearly 12 days. During the same period, the market increased by 1150 points, however, the market must have taken a breather as the run-up was overextended. Stocks to buy L&T Finance Holdings BUY, CMP: Rs 92.25, TARGET: Rs 99, SL: Rs 89 The stock is trading into a rising channel pattern forming the higher top and higher bottom series on the weekly scale, post-breakout the counter witnessed a bit of a selling pressure which resulted in retesting of the trend line. Thus bullish continuation from the current level is very likely to remain in the near term. Coal India BUY, CMP: Rs 184.5, TARGET: Rs 195, SL: Rs 179 The stock had given a very impressive up move in the recent past by forming a bullish continuation chart pattern, presently due to some profit booking, there is a momentary pause in the uptrend however it seems that a strong reversal is very likely from the double bottom support zone on the daily chart for further upward movement. Tech Mahindra BUY, CMP: Rs 1,539.1, TARGET: Rs 1,620, SL: Rs 1,505 Post its decline from the levels of 1540 the counter went into a narrow range-bound movement and it came out of the range with a series of strong bullish candlestick patterns which should move the stock further on the higher side in coming sessions. HDFC Life Insurance CompanyBUY, CMP: Rs 702.8, TARGET: Rs 740, SL: Rs 685 The counter had been in a strong uptrend move however the recent price correction from its supply zone has plunged the counter to its important retracement support area, as a result the pullback rally is very likely from the current levels. (Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd. Views expressed are the author’s own.)
However, he believes that the impact on the Indian market is going to be temporary since there could be some short-term impact on flows into Indian equity markets. But since the Indian economy is on a strong wicket and will continue to remain resilient.
“Improved fiscal situation, controlled current deficit, stable interest scenario combined with good corporate earnings should lead to limited impact on the Indian bond market and equity market too,” he added.
The midcap and smallcap indices took a bigger knock with the BSE MidCap fell 2.51%, while BSE SmallCap index dived 4.18%. According to Amnish Aggarwal, head, research, Prabhudas Lilladher, the valuations were already high and some correction was expected. “If the situation sustains as it is then further correction can’t be ruled out,” Aggarwal said.
Telecommunication and industrials indices were the top laggards with BSE Telecommunication declining 3.82%, followed by BSE Industrials falling 3.26%. JSW Steel (-2.99%), Tata Steel (-2.52%) and Tata Consultancy Services (-2.44%) were the top losers of Sensex.
Surprisingly, both foreign portfolio investors and domestic institutional investors were net buyers today. While, FPIs net bought shares worth Rs 252.25 crore, DIIs have purchased shares worth Rs 1,111.84 crore, as per provisional data from exchanges.
Calling this a “normal phenomena” Pankaj Pandey, head, research, ICICI Direct said, “I will not really give too much weight to a single day buying figure. Amid concerns of elevated interest rate and geopolitical tensions, in a typical market cycle, 8-10% correction is possible at any point in time.”
The brunt of geopolitical conflict, elevated interest rates and rising crude oil prices was also felt by other Asian- Pacific markets. Jakarta Composite Index lost 1.57% followed by Shanghai Composite Index and PSEi, which fell 1.47% and 0.89%, respectively. Nikkei and KOSPI declined 0.83% and 0.76%.