Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:
DIVGIITTS: Buy above 680 and dips to ₹640 | Stop ₹620 | Target ₹730-755
ARVINDFASN: Buy above 541 and dips to ₹515 | Stop ₹498 | Target ₹591-610
TIRUMALCHM: Buy above 309 and dips to ₹296 | Stop ₹287 | Target ₹339-355
Stock markets today
Dalal Street’s early enthusiasm for the GST reforms ebbed by Thursday afternoon, 4 September, with benchmarks giving back most of their intraday gains. At the close, the Sensex added 150.30 points (0.19%) to 80,718.01, while the Nifty inched up 19.25 points (0.08%) to 24,734.30. Market breadth was weak, with 1,716 advances, 2,232 declines, and 137 unchanged.
Sectoral performance was mixed. The Nifty Auto led the gainers, rising 0.81%, followed by FMCG up 0.18%, though both retreated from stronger early moves. On the downside, the Nifty PSU Bank dropped 1.2%, while Energy and IT each slipped around 1%. Realty fell 0.81%, Metal shed 0.64%, Media eased 0.59%, Infra declined 0.58%, and Pharma edged down 0.18%.
The session reflected profit booking and selective buying, as traders weighed GST optimism against broader market caution, leaving indices off their intraday highs despite early momentum.
Outlook for trading
Volatility was the key feature of the market throughout this week, and the market was whipped around quite a bit as global trends were the main drivers of the sentiment. There really wasn’t much by way of local news flow to contain the volatility induced. The moves were also reasonably large, creating sufficient moves to bring people in, only to get knocked out the following day! Trading, therefore, was quite difficult throughout the week, and it would have been a wonder if one came out largely unscathed in the week.
The rally after a strong decline in the middle of the week does restore some confidence. The strong surge in GST optimism. However, the happiness was short-lived, as the recovery that emerged swiftly from lower levels witnessed a heavy sell-off as highs were once again challenged. The attempts continue to emerge as a sell-on rally market as the trends attempt to carve out a bullish possibility.
As we head into the last trading day of the week, we could experience some profit booking as we are not nearing an important inflexion zone. However, the trends are still circumspect and are witnessing limited market participation. The Nifty, as mentioned yesterday, failed yet again at the resistance around the 25,100 mark. Hence, this level will assume a lot of importance as we head into the next week. On the other hand, the Nifty Bank has to clear 54500 to clear the air of uncertainty. Volatility is now part of the ever-changing market scenario as the sentiment keeps changing. Risk management is critical, as the lack of clarity is greater than ever.
The Nifty is showing a resolve now to move higher. It has once again closed above 25200, which acts as a big hurdle, as it is also the Max Pain point. An interesting point to note is that the bullish revival is seen as the PCR has stepped above 1. With the Open Interest data clearly indicating a revival, one should keep tracking a 30-minute range breakout on Thursday, as it continues to be an important metric for creating some longs.
As indices are not showing much inclination to move higher one should look to encash some stock specific action in the next few days.
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Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:
Divgi TorqTransfer Systems Ltd (Cmp 676.75)
DIVGIITTS: Buy above 680 and dips to ₹640 | Stop ₹620 | Target ₹730-755
Why it’s recommended: Divgi TorqTransfer Systems Ltd (DIVGIITTS) is an India-based company that designs, develops, and manufactures advanced drivetrain components and systems for the automotive industry. This counter has simultaneously been showing some revival as it is getting steady help from cloud support and generated a buy opportunity yesterday. After a push above the clouds, we can see that the stock is set for a turnaround. Go long.
Key metrics:
P/E: 75.68,
52-week high: ₹712,
Volume: 94.03K.
Technical analysis: Support at ₹600 | Resistance at ₹800.
Risk factors: Delays in government subsidy receipts and market collections. Disruptions to interactions with farmers.
Buy at: Above 680 and dips to ₹640.
Target price: ₹730-755 in 1 month.
Stop loss: ₹620.
Arvind Fashions Ltd (Cmp 540.45)
ARVINDFASN: Buy above 541 and dips to ₹515 | Stop ₹498 | Target ₹591-610
Why it’s recommended: ARVINDFASN has shown a V-shaped recovery, indicating that the trends in this counter look strong for some positive traction ahead. The prices have been moving in oscillation, forming a V-shaped recovery, and the recent move out of the consolidation augurs well for the prices. Can look to go long.
Key metrics:
P/E: 376.74,
52-week high: ₹639.70
Volume: 280.24K.
Technical analysis: Support at ₹503 | Resistance at ₹625.
Risk factors: Changes in government regulations and delays and debt servicing capacity due to increased borrowings.
Buy at: Above 541 and dips to ₹515.
Target price: ₹591-610 in 1 month.
Stop loss: ₹498.
Thirumalai Chemicals Ltd (Cmp 308.50)
TIRUMALCHM: Buy above 309 and dips to ₹296 | Stop ₹287 | Target ₹339-355
Why it’s recommended: The counter has been undergoing some consolidation and has formed a rounding pattern after facing intense selling pressure for more than eight weeks. The prices hit a consolidation zone at cloud support, indicating that a positive turnaround is emerging. After the recent test of the TS & KS Bands, a strong closing on Thursday augurs well, so we can look at some positive vibes emerging.
Key metrics:
P/E: 91.20,
52-week high: ₹394.95,
Volume: 347.88K.
Technical analysis: Support at ₹280 | Resistance at ₹370.
Risk factors: Supplier retention and potential customer preferences, regulatory challenges.
Buy at: Above 309 and dips to ₹296.
Target price: ₹339-355 in 1 month.
Stop loss: ₹287.
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.
