27 stocks in largecapfall 10-30%
Time to buy? 27 stocks in largecap index fall 10-30% from highs
As many as 27 stocks in the BSE Largecap index have fallen 10-30% from their respective 52-week high recorded in 2019
Kshitij Anand@kshanand
NSELIVE
29 Aug, 2019 11:54
1,339.05
-5.60 (-0.42%)
Volume 793892
Todays L/H 1,338.051,355.00
Benchmark indices have fallen 6-8 percent from their respective record highs registered in June 2019 but the big carnage was seen in individual stocks, especially in the small and midcap space.
Largecaps displayed more resilience at a time when most of the stocks were trading in a downtrend. There are as many as 27 stocks in the S&P BSE Largecap index which have fallen 10-30 percent from their respective 52-week high recorded in the year 2019.
Some of the stocks which are available at a discount include names like L&T, Axis Bank, Bajaj Finance, Titan Company, Shree Cement, Siemens, Bajaj Finserv, Dr. Reddy’s Laboratories, HDFC Bank, HDFC, Bajaj Auto, and ICICI Bank.
RELATED NEWS
Stock alert | This FMCG major’s shares rose 23x in 10 years; will the rally last?
Trade Setup for Thursday: Top 14 things to know before Opening Bell
So can we say all stocks in the largecap index are strong buy even though they might be available at a steep discount? Maybe not, say experts.
Some of the stocks which are part of the largecap index have seen massive wealth erosion in 2019 largely on account of fundamental or structural factors. But, there are some stocks which are still good buy on dips stocks.
Factors like economic slowdown, liquidity concerns, lack of any big bang announcements in budget and surcharge on super-rich including the FPIs (which has been rolled back recently), etc. led to muted investors sentiments, which have dragged the markets down in 2019.
“Amongst the stocks mentioned above, we believe one should invest in ICICI Bank, Bajaj Auto, Tech Mahindra, Aurobindo Pharma, BPCL, etc. in a phased manner as these companies are fundamentally sound with strong financials and have the potential to earn healthy returns over the long term. However, one should avoid investing in PNB (growth concerns) and UPL(high debt levels),” Ajit Mishra, Vice President, Research told Moneycontrol.
Generally, during market corrections fundamentally strong stocks correct lesser than the general market because of their inherent fundamental strength which can be seen in the table above.
“Stocks correcting more than 30-50 percent run the risk of falling further and therefore should be avoided especially if the index has corrected just by about 9 percent so far, which is the current situation,” Umesh Mehta, Head of Research, SAMCO Securities told Moneycontrol.
“Stocks like ICICI Bank, HDFC Bank, Bajaj Finance, Siemens, Shree Cement have all fallen less than 20 percent while the broader indices have fallen over 30-40 percent. By identifying such relatively strong performers investors can get to know about the fundamentals of sound companies. For eg., ICICI Bank, HDFC Bank, Dr. Reddy’s have the highest consensus brokerage targets. Investors should, therefore, focus on such largecap stocks,” he said.
The Nifty index is currently at about the same level as it was at the beginning of the year and is trading with marginal gains so far in the year 2019, but has fallen by about 9 percent from its respective 52-week high.
Correspondingly, stocks have corrected in various proportions from their highs and give an opportunity to investors to accumulate largecap blue-chip stocks at these levels which investors should make use off.
“Simultaneously, there are a few stocks which have delivered solid performance in Q1FY2020. We accordingly prefer stocks like Titan, Bajaj Finance, HDFC Bank and HDFCLtd,” Atish Matlawala, Sr Analyst, SSJ Finance & Securities told Moneycontrol.
“We would also recommend accumulating stocks like ICICI Bank, Axis, Siemens, UltraTech Cement, Larsen & Toubro at different price intervals should they continue to see further price corrections,” he said.
Tech Check: Avoid going short on YES Bank; Godfrey Phillips good buy on dip
We have collated a list of stocks which remained in focus on Wednesday because of their price action. The technical outlook is for the near to medium term.
Indian market snapped its three-day winning streak and closed in the red on August 28 and the weakness continued a day later as well.
The Nifty bounced back from its 20-day moving average (DMA) on August 28 but breached the day’s low of 10,987 in the trade the next day, which does not auger well for the bulls. The next big support for the index is at 10,900-10,850.
We have collated a list of stocks that remained in focus on August 28 because of their price action. The technical outlook is for the near to medium term.
Analyst: Romesh Tiwari, Head of Research, CapitalAim
IDBI Bank: Stock likely to see some support near Rs 24
IDBI Bank witnessed a selloff on August 28 after S&P Global placed the private lender's unsecured debt rating on 'credit watch negative'.
From a technical point, the stock has been sliding since the beginning of 2019 from the mid-60 levels to the recent low seen at around Rs 24 .
On the technical chart, it is still showing a sell with RSI at 42.85 and MACD also indicating the downtrend.
The risk-reward ratio is not favorable to go short on the stock. It has some support around Rs 24 and that will act as a make or break level for the stock.
YES Bank: Avoid shorting the stock at current levels
The private sector lender witnessed a selloff on August 28 after Moody's downgraded its credit rating with a negative outlook, citing lower-than-expected capital raising.
The stock has been falling for some time now and hit a fresh lifetime low at Rs 53.2 on August 22 . On the charts, it is weak, with RSI placed at 37.2 and negative divergence indication by MACD is not encouraging for buyers.
But, with STOCHRSI(14) is indicating it to be in the oversold zone, and the high volatility witnessed in the recent past makes it a risky stock to short at these levels. I would suggest short-term traders to avoid this for now.
Godfrey Phillips: Good buy on dips stock with a target of Rs 1,170
Godfrey Phillips rallied after media reports suggested that Philip Morris International and Altria may merge once again.
In terms of technical structure, RSI (14) is at 69.698 and MACD at around 64 indicates more upside . We have seen a sharp rise in the stock from sub-700 levels at the start of August to Rs 1,050 levels that suggest good momentum in the stock.
I will advise traders to buy it on a dip, around Rs 920-930 levels, with a stop loss at Rs 850 and a target of Rs 1,170 in the short term.
Tata Global Beverages: Rally to continue after fitting 52-week high
The stock hit its fresh 52-weeks high at Rs 281.30 on August 28 and if it closes above this level August 29, it could further move towards Rs 295-300 levels, where there is some resistance.
On the charts, RSI(14) at 63.619 and positive divergence on MACD are suggesting that upward movement is likely to continue.
I advise traders to buy the stock on dip around Rs 250, with a stop loss of Rs 235 and a target of Rs 290 in the short term.
Apollo Hospitals: Wait for dips towards Rs 1,400 before going long
Apollo Hospitals hit a fresh 52-week high and is moving with strong momentum. If the stock sustains above Rs 1,430 for the next couple of sessions on a closing basis, it can further move 10 percent higher .
On the charts, the trend remains bullish but is now trading near the overbought zone. I will wait for some consolidation at lower levels and suggest traders to buy on dips around Rs 1,400, with a stop loss at Rs 1,340 and a target of Rs 1,600 in the short to medium term.
(The author is Head of Technical and Derivatives, Sanctum Wealth Management)
11,200 crucial for next rally; top 5 stocks for Sept series which can return 10-16%
The Nifty has resistance zone around 11,150-11,200 where recent highs, 200-DMA and 38.2% Fibonacci retracement of the fall 12,103-10,637 are seen.
Ashish Chaturmohta
After three consecutive sessions of gains, the market witnessed profit booking. Post flat opening, the Nifty saw a steady decline through the day and bounced back in the last hour of trade. The Nifty finally settled at 11,046 down by 0.53 percent on August 28.
As for the broader market, BSE Midcap and Smallcap lost 0.92 percent and 0.64 percent respectively. The market breadth on the NSE was negative with 3 declining stocks compared to 2 advancing.
The Nifty has resistance zone around 11,150-11,200 where recent highs, 200-DMA and 38.2 percent Fibonacci retracement of the fall 12,103-10,637 are seen.
Thus, 11,200 needs to be taken out for the uptrend to continue towards 11,370 levels. On the downside, immediate support is placed at 10,950 level which is 38.2 percent Fibonacci retracement of the rise 10,637-11,142. A break below 10,950 could take the Nifty50 towards 10,830 and 10,750 levels.
In Nifty September monthly expiry options, maximum open interest for Put is seen at strike price 11,000 followed by 10,600; while for Call maximum open interest is seen at 11,200 followed by 11,700.
Thus, option distribution is suggesting upside resistance at 11,200 and sustaining below 10,950, markets may pressure on the downside.
India VIX jumped by 5.18 percent to close at 16.84 levels. VIX has bounced back from 16 levels and further rise towards 18 -19 will cap the upside. However, sustaining below 16 will help breach overhead resistance.
Here is a list of top five stocks which could give 10-16% return in the next 1-3 months:
ICICI Prudential Life Insurance: Buy | LTP: Rs 417 | Stop Loss: Rs 398 | Target: Rs 465 | Upside 11 percent
The stock hit an all-time high of Rs 509 in July last year and then declined to touch a low of Rs 277 in February this year. The rally from the low of Rs 277 faced resistance at Rs 405 odd levels.
For the last three months, the stock was consolidating below Rs 405 levels and on Wednesday it gave a breakout. The stock has formed a bullish long-body candle accompanied by strong volumes and managed to close above the consolidation zone to hit a fresh 52-week high.
MACD has given a positive crossover, thus, the stock can be bought at current levels and on dips towards Rs 410 with a stop loss below Rs 398, and a target of Rs 465 levels.
Tata Global Beverages: Buy | LTP: Rs 280 | Stop Loss: Rs 265 | Target: Rs 325 | Upside 16 percent
The stock is in an uptrend forming higher tops and higher bottoms on the daily chart after hitting a low of Rs 177 back in February.
The stock has been witnessing high volumes on the up move, but below-average volumes which indicate that long positions continue to hold their positions.
In late June, the stock touched a high of Rs 277 where 61.8 percent (271) Fibonacci retracement of the major fall was seen from Rs 328 to Rs 177.
After consolidating below Rs 277 levels, the stock on Wednesday gave a breakout with bullish long body candle and high volumes which indicates buying participation in the stock.
Price has given a breakout on the upside from the Bollinger Band with the expansion of bands indicating a continuation of the trend in the direction of the breakout on the daily chart.
MACD has given a positive crossover with its average above equilibrium level of zero on the daily chart. Thus, the stock can be bought at current levels and on dips towards Rs 275 with a stop loss below Rs 265, and a target of Rs 325 levels.
Avenue Supermarts: Buy | LTP: Rs 1,553 | Stop Loss: Rs 1,500 | Target: Rs 1,700 | Upside 10 percent
After hitting a low back in March, the stock has been moving higher along the rising support trend line connecting closing price of Rs 1,234 and Rs 1,397.
It has formed a base after consolidating in the range of Rs 1,530-1,230 odd levels. The stock has seen a breakout above Rs 1,530 levels.
If we look at the higher time frame weekly chart, the stock is in the process of forming a double bottom pattern with lows at Rs 1,230 odd levels.
MACD has moved above the equilibrium level of zero and is moving higher on the weekly charts. Thus, it can be bought at current levels and on dips towards Rs 1,535 with stop loss below Rs 1,500 for a target of Rs 1,700 levels.
Petronet LNG Ltd: Buy | LTP: Rs 260 | Stop Loss: Rs 248 | Target: Rs 295 | Upside 13 percent
The stock touched an all-time high of Rs 275 in November 2017 and then corrected down towards 200-odd levels in May last year.
The stock has formed multiple lows placed at Rs 200 levels. It has been forming higher lows for the last 8 months on the weekly chart which indicates buying coming in at lower level.
The recent swing lows were formed at 200-day moving average indicating as value area. The stock faced resistance at Rs 255 levels and witnessed a breakout on strong volumes.
The price has given a breakout on the upside from Bollinger Band with the expansion of bands indicating a continuation of the trend in the direction of breakout on daily as well as on the weekly chart.
Thus, the stock can be bought at current levels and on dips towards Rs 256, with a stop loss below 24, and a target of Rs 295 levels.
JSW Steel Ltd: Sell | LTP: Rs 206 | Stop Loss: Rs 213 | Target: Rs 185 | Downside 10 percent
The stock is in a long-term downtrend forming lower tops and lower bottoms for the last 11 months. After a bounce back from Rs 209-231, the stock has broken its swing low of Rs 209 and resumed its downtrend.
Last 3 sessions have witnessed above average volumes with negative price action indicating fresh selling pressure.
The stock has broken its 200-week moving average placed at Rs 232 and is acting as crucial resistance for the last few weeks.
MACD has given negative crossover with its average its below equilibrium level of zero on the daily chart. Thus, the stock can be sold at current levels and on rise towards 208 with a stop loss above Rs 213, and a target of Rs 185 levels.
Good information ! Thanks for sharing
ReplyDeleteGodfrey Phillips India Ltd