Indian markets remained volatile on September 4 after a selloff in the previous session.
The Sensex broke below 37,000 on September 3, its worst fall of the year in percentage terms. In terms of sectors, the S&P BSE Telecom index was the top gainer, followed by banks, metals, and public sector stocks. On the other hand, auto, consumer, and healthcare stocks remained under pressure.
A list of stocks that were in focus on September 3 because of their price action. The technical outlook is limited to near and medium-term:
Analyst: Romesh Tiwari, Head of Research, CapitalAim
TVS Motor: Contra buy at current levels with a target of Rs 390-400
TVS Motor Company reported a fall of 15.3 percent in August sales on a year-on-year basis. It registered sales of 290,455 units, a 15.3 percent decline from the 343,217 vehicles it sold in the same month in 2018.
However, the August figure show a minor uptick from the 279,465 units the company sold in the previous month.
The stock is beaten down badly along with other auto stocks for quite some time. It showed a bounce back after hitting a 52-week low of Rs 340.30 but on the daily chart, it is still indicating weakness with negative MACD and RSI(14) at 42.92.
There are some signs of a decrease in volatility, and hopes of a positive festive season, I will advise a contra play on this stock for the medium term. TVS Motor can be bought on dips for a target of Rs 390-400, with a stop loss of Rs 348 for a medium term.
Tata Motors: Buy on dips with a target of Rs 125
Tata Motors reported a 58 percent decline in domestic passenger vehicle sales in August. The company sold 7,316 units against 17,351 vehicles in the same month in 2018, the automaker said in a statement.
The stock has been in the bear grip for months now and it touched a multi-year low on August 22 at Rs 106. The recovery from Rs 106 level will need some consolidation in the range of Rs 110-125 for at least a couple of weeks.
A breach of this range on either side will strengthen the directional move. On the daily chart, it is still weak, but on weekly charts, it is trading in the oversold zone.
I would suggest a buy, better when it drops around Rs 106-108, with a target of Rs 125 in the short term, with a stop loss of Rs 100 in a month’s time.
Tata Steel: Sell on rallies; next target on downside seen at Rs 305
Tata Steel witnessed selling pressure on September 3 after it announced the closure of a plant in the southern Welsh city of Newport, with a potential loss of around 400 jobs at the UK site.
We have seen a steep fall since the beginning of July and still there are no signs of stability in the stock. Though the stock is weak but in oversold zone on the weekly chart (RSI (14) at 20.245 and ROC -31.681) and hence there may be some pause in the downslide, the scope of recovery is low for the stock.
On the daily chart also, it is looking weak with RSI(14) placed at 32.915I and negative MACD. I will advise to go short on any bounce with a stop loss of Rs 352, and a target of Rs 305.
Tech Mahindra: A conditional buy after a dip towards Rs 640 & a target of Rs 750
IT companies will get the upside of falling rupee at a time when most of the other sectors are heading south. Investors and traders are looking at stocks such as Tech Mahindra, Infosys for good returns for the next couple of quarters.
The stock is trading above its 30 and 50-day moving averages and has good support around Rs 650 levels. On the daily chart, RSI(14) at 61.78 and positive MACD and ROC is indicating that the stock can move further upwards and test its 100 DMA placed around 727.
But, given the negative sentiment in the general market, I will advise a buy only if it dips near its support around Rs 640, with a stop loss of Rs 600, and a target of 750 in medium-term.
HDFC AMC: Avoid putting fresh capital in the stock
In the last couple of weeks the stock has seen a steep rise from the level of Rs 2,138 and the momentum is still high, with RSI(14) at 75.80 and ROC at 19.13 on the daily chart.
Those who are holding the stock should enjoy the ride and keep trailing stop losses but I would not advice new traders to enter at these levels. With this momentum, the stock may touch Rs 2,950 in the short-term with support levels around Rs 2,300-2,370.
ICICI Bank: Use sell on rise strategy above Rs 400
The stock is near its support level around Rs 390 and can fall further to Rs 340 levels in the short-term. On the daily chart, the stock is weak and I will suggest investors to sell on rise above Rs 400 for a short-term target of Rs 340, and a stop loss of Rs 421.
Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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