Stock to buy and sell for 18 February: Raja Venkatraman recommends these three stocks

Stock market today: A recap

Indian stock markets saw bearish sentiment prevail, as previously highlighted, play out at the open on February 17, with selling pressure at lower levels dragging prices down, reinforcing the market’s fragile trend. However, broader indices snapped an eight-day losing streak, closing marginally higher after a volatile session.

The Nifty settled around 22,950, supported by gains in pharmaceutical, metal, and financial stocks. Despite a weak start amid mixed global cues, Indian indices faced selling pressure for most of the day. Mid-session buying, however, helped recover from intraday lows, leading to a positive close.

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The Sensex edged up 57.65 points (0.08%) to 75,996.86, while the Nifty gained 30.25 points (0.13%) to 22,959.50.

Market outlook for 18 February

The market’s volatile nature persisted on 17 February, forming higher lows throughout the day before closing on an encouraging note. However, the modest gains at the close have yet to inspire confidence. We continue to hold on to slim hopes of a rebound in the coming days, but the sharp decline over the past few sessions has weighed heavily on sentiment.

Trends remain muted, with stock-specific action dominating. The ongoing volatility presents challenges as traders and investors try to navigate the market’s erratic swings. Stocks with positive tailwinds from Q3 numbers are attracting buying interest, while those with weak or negative performance are being punished.

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The outlook continues to favor a “sell on rallies” strategy, as the failure to sustain upward momentum casts doubt on the potential for a recovery. The charts indicate a brief relief rally, but trends remain unclear. The ADX DMI setup shows the negative DI inching higher, suggesting that a downward trend could emerge.

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(Source: TradingView)

Option data reveals pressure at higher levels, with sustained selling indicating strong headwinds. The Max Pain for Bank Nifty is at 50,000 and for Nifty at 23,100, signalling resistance. With the rally now facing selling pressure, the market’s inability to close above these levels is gradually fostering a more bearish sentiment. Overall, fatigue is setting in, as there are no significant positive news flows to drive optimism.

Three stocks to buy and sell, recommended by NeoTrader’s Raja Venkatraman:

• Poonawala Fincorp.: Sell below ₹285, stop ₹293, target ₹260

Shares of this financial services company have been losing its footing and the steady decline in prices resolve to move higher and is demonstrating strong trended action in the last few days. As with the negative Directional Index gaining strength the prices are steadily declining indicating signs of selling emerging. Consider going short.

• Sarda Energy & Minerals Ltd: Buy above ₹481, stop ₹466, target ₹510

After a period of consolidation at the MA Bands, this metal stock has posted a strong Q3, indicating the company’s ability to overcome challenges and make a solid upward move. The long body candle seen on Monday suggests further price momentum. Positive sector sentiment supports the continuation of a buy scenario.

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(Source: Trading view)

• PVR Inox: Sell at ₹1,006, stop ₹1,025, target ₹920

PVR Inox is facing a rough patch with a string of disappointing movie releases, putting further pressure on profitability. The lack of a consumption recovery is contributing to mounting concerns, and the trends remain clearly negative. The stock has been steadily declining in recent sessions, and volatile market conditions suggest the downtrend could continue. With momentum showing a negative bias, we maintain a short position.

Also read | Hindalco’s Q3 story: Novelis lags, while India biz holds up

Raja Venkatraman is co-founder, NeoTrader.

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.

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