The market, after two-day consolidation, has a steep fall on June 16, taking the total loss so far for the week to over 5 percent, as bears hit the global sentiment after Federal Reserve announced a 75 basis point hike in interest rate, the biggest increase since 1994, and indicated another 50-75 bp hike in July policy meeting.
The selling across sectors dragged the benchmark indices below their earlier 52-week low, which weakened the sentiment further during the day. Finally the BSE Sensex fell more than 1,000 points to close tad below 51,500, and the Nifty50 lost over 330 points to 15,361, the lowest closing level since May 2021.
The biggest loser was Nifty Metal which tanked more than 5 percent. Nifty Bank, Auto, Financial Services, and IT indices were down more than 2 percent.
The broader markets also joined the bear run as the Nifty Midcap 100 index corrected over 2 percent and Smallcap 100 index declined more than 3 percent.
Stocks that were in action and outperformed the market included Vakrangee which surged 9 percent to Rs 27.1, Welspun India which jumped 2.55 percent to Rs 70.5, Ramco System which gained 8 percent at Rs 291.4, Bharat Gears which jumped 5.4 percent to Rs 130.60, and SIS which climbed 4 percent to Rs 462.75.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
Since 2018, there have been a number of times when the stock has dropped to the level of Rs 24 or Rs 23, it has risen sharply. The stock was at Rs 24.60 on Tuesday and on Thursday, it is back at the level of Rs 28.
At higher levels, it will find ultimate resistance at Rs 40 or Rs 44, which is a decent upside if it goes up.
The strategy should accumulate between Rs 26 and Rs 24 for targets Rs 34, Rs 40 and Rs 44. However, since the stock is in the smallcap category, we need to place a stop-loss at Rs 22 for the same.
Based on the daily chart, the stock entered an extended corrective pattern after rallying from the pandemic low of Rs 18.50 to Rs 168 levels. The stock has been consolidating between Rs 77 and Rs 62 levels for the past 6 weeks.
It is likely to move towards Rs 84-85 levels, where it has the most difficult resistance based on the Fibonacci retracement level.
Technically it is advisable to reduce the investments between Rs 84-85 levels, the stock may again move back to Rs 65-62 levels.
The stock is declining from a high of Rs 780-785 and is currently trading at Rs 288 after touching Rs 222 level. The stock is following a series of lower top and lower bottom, which is negative for it, however, there is a positive part.
The stock has started to diverge positively from May 2022. It is too early to say, but technically, we think the stock is on the verge of reversing its bearish trend.
A fresh buy position between Rs 290 and Rs 250 is recommended, however, a stop-loss at Rs 220 is mandatory for holding any long positions. Resistance will be at Rs 330 and Rs 400.
The level of Rs 120 is offering significant support to the stock, however, the 200-day simple moving average (SMA), which is at Rs 149 is not allowing the stock to trade higher.
It is negative for the stock and a fresh buying is advisable only if it crosses Rs 149 and stays above it. The stock may fall to Rs 105 or Rs 100 if it breaks the support of Rs 120.
It is forming the most complicated rectangle consolidation formation between the trading range Rs 420 and Rs 530. Until the stock is not closing below the level support of the lower boundary, investors can hold on to it.
Below the levels of Rs 420, the stock would gradually fall to Rs 330 with support at Rs 400 and at Rs 360.
On the higher side, the chances of hitting Rs 530 would turn bright if it stays above the resistance of 200 days SMA, which is at Rs 480.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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