The market seems to have witnessed profit-booking after a day of rebound, and fell a third of a percent on October 27, dragged by private banks, metals and auto stocks. However, IT, pharma, PSU bank and FMCG stocks offered support.
The Nifty50 shed 57 points to close at 18,211 mark, and The BSE Sensex was down 207 points at 61,143.33, while the broader markets outpaced frontliners as the Nifty Midcap 100 index rose 0.08 percent and Smallcap 100 index gained 0.27 percent.
Stocks that were in focus include Asian Paints, which rallied 4.2 percent to close at Rs 3,094.65 and was the biggest gainer in the BSE Sensex after a price hike of products. Godrej Consumer Products continued its run for the second consecutive session, rising 4.76 percent to Rs 1,009.90, which was the second biggest gainer in the F&O segment.
Private sector lender Axis Bank was the biggest loser in the BSE Sensex and F&O segment, falling 6.46 percent to close at Rs 787.50 after the September quarter earnings.
Here's what Gaurav Sharma of Globe Capital Markets, recommends investors should do with these stocks when the market resumes trading today:
The stock is bouncing back after testing its 200 EMA (exponential moving average) placed around Rs 2,856 levels. This is a positive sign as that moving average will limit its downside movement.
Overall, the stock is in a strong uptrend and is now available after some profit-taking from higher levels. This provides good opportunity for investors to accumulate the stock.
The ongoing festive season is also a positive and will impact its next quarterly numbers. Hence, we advocate taking long positions for an immediate target of Rs 3,400, while Rs 3,700-plus is also a reasonable target for the medium to long term.
Godrej Consumer Products
This stock has underperformed the benchmark in the recent past, which is not an exception as the majority of FMCG stocks saw profit-taking in the past couple of weeks, especially after Hindustan Uniliver's numbers. Technically, this profit-taking should be considered a healthy sign as it gives traders an opportunity to take fresh long positions.
We see the stock heading towards Rs 1,060-1,120 levels in the immediate near term. Sustenance above that mark will open the gates for a further up move till Rs 1,200 and beyond. Traders are advised to keep a stop loss below Rs 900.
On October 27, the stock witnessed steep selloff, which was a reaction after the quarterly numbers were announced. Prior to this, it was in a strong up trend, poised to scale higher. We still see the bullish trend intact till Rs 720 is held on the downside.
Hence, medium to long term traders are advised to utilise the ongoing profit-taking to accumulate the stock for targets close to Rs 1,000.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.