Stocks to buy: Raja Venkatraman’s top picks for 25 September

Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:

TDPOWERSYS (Cmp ₹574.10)

• Why it’s recommended: TD Power Systems Ltd. (TDPOWERSYS) is an India-based company that manufactures AC generators and electric motors for various applications. The last few days’ prices are holding the bullish bias, and the possibility of more upward traction has also emerged as it has moved above the recent highs. As momentum remains resolute, one can look at more upside in store in the next few days.
• Key metrics:

P/E: 52.72,

52-week high: ₹575.70,

Volume: 1.33M.

• Technical analysis: Support at ₹535, resistance at ₹650.
• Risk factors: High debt levels and Dependence on Major Customers and economic downtruns could impact returns.
• Buy at: above 575 and dips to ₹550.
• Target price: ₹625-640 in 1 month.
• Stop loss: ₹540.

GRSE (Cmp ₹2714.80)

• Why it’s recommended: Garden Reach Shipbuilders & Engineers (GRSE) is an Indian government-owned defence shipyard based in Kolkata, specializing in building naval and commercial vessels. The Ministry of Finance granted “infrastructure status” to large ships, a long-standing demand of India’s shipping industry. This has helped the strong rebound of this counter from lower levels. With some new found buying and new found momentum consider going long.
• Key metrics:

P/E: 55.50,

52-week high: ₹3535

Volume: 2.58M

• Technical analysis: Support at ₹850, resistance at ₹1200.
• Risk factors: Increased competition, regulatory changes, and sector-specific challenges in the shipbuilding industry.
• Buy at: above 2730 and dips to ₹2670.
• Target price: ₹2930-3050 in 1 month.
• Stop loss: ₹2650.

DATAMATICS (Cmp ₹900.40)

• Why it’s recommended: Datamatics is an Indian company that provides digital technology, operations, and experience solutions to help businesses enhance productivity and customer experience. This counter has been steadily declining and is now forming a support around the KS line on the daily chart with a long body candle. A strong rebound on Wednesday has now fuelled more buying interest in the counter. Consider a buy.
• Key metrics:

P/E: 83.74,

52-week high: ₹1119.95,

Volume: 413.22K.

• Technical analysis: Support at ₹850, resistance at ₹1050.
• Risk factors: Intense competition in the IT services market, potential data breaches and cyber-attacks that threaten customer data and company reputation.
• Buy at: above 905 and dips to ₹870.
• Target price: ₹998-1025 in 1 month.
• Stop loss: ₹870.

Stock Market Recap

On 24 September, benchmark indices extended their losing streak for a fourth straight session, pressured by broad-based selling across sectors except FMCG. The Nifty 50 slipped below 24,100, closing at 25,056.90, down 112.60 points (0.45%), while the Sensex fell 386.47 points (0.47%) to 81,715.63. Midcap and small cap indices also declined, shedding 0.9% and 0.5% respectively.

Weak global cues and cautious commentary from the US Federal Reserve weighed on sentiment, dragging indices near the 25,000 mark. Sectoral losses ranged from 0.5% to 2%, with auto, IT, media, metal, oil & gas, and realty under pressure. FMCG was the only sector to post gains.

Tata Motors, Wipro, Bharat Electronics, Jio Financial, and Hero MotoCorp were the top Nifty laggards. Meanwhile, HUL, Nestle, NTPC, JSW Steel, and Power Grid advanced.

Outlook for Trading

Moving to the charts we note that the trends have been largely oriented towards trading rather than investing. Hence, from a trading perspective we can note that on the Daily charts highlight that the rally into the cloud region has restricted the rise. The rends remain muted and is now getting tired and this could prove to be a threatening blow to the sentiment. The uncertain closing seen in the Daily chart of Nifty in the September series does not bode well for the market.

The trend that is emerging clearly suggests that the decline seen on Wednesday is now encountering the support zone and the 4th day of decline ensured that the prices traded into the cloud region. Hence, one should track the trends that are in progress as upmove needs to continue their way above 25100 (Nifty Spot) to retain the bullish bias.

Momentum on hourly charts are indicating that the prices remain pressured and we may witness a resumption of selling pressure once 25000 is given away. With the gradual and hesitant decline rise emerging from lower levels we can expect the rise to remain hesitant.

For undertaking shorts, we need to see Nifty move below 24900 for a potential drop towards 24750 as per the Open Interest data a sharp fall is expected once key resistance levels break. With the Nifty closing near the Max Pain at 25100 we should look to approach this week.

If we witness a 30-minute range break on Thursday we can consider trading on either side as the trends still remain tentative where we expect some resistances to kick in. As ranging market is in play, we need to be quick in profit taking as we the trend does not have sufficient steam to move strongly in either direction.

The readings from the Option Data suggests that PCR has steading at 0.78, highlighting that the trends are receiving support at lower levels important stage with some steady Put writing at 25000 levels continues to prove to be a fuel that can assist recovery to help the buying interest for a rise. Some interesting trends are developing right now.

Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.

Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.

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.