Indian benchmark indices kicked off the week with a sharp selloff, falling deep in red on Monday on the back muted earnings from the India Inc and feeble sentiments across the globe. Broader markets faced the wrath of bears. BSE Sensex cracked 824.29 points, or 1.08 per cent, to end the session at 75,366.17. NSE's Nifty50 plunged 263.05 points, or 1.14 per cent, to settle at 22,829.15 for the day.
Some buzzing stocks including Bajaj Auto Ltd, Vedanta Ltd and Ambuja Cements Ltd are likely to remain under the spotlight of traders for the session today. Here is what Jigar S Patel, Technical Research Analyst at Anand Rathi Shares and Stock Brokers has to say on these stocks ahead of Tuesday's trading session:
Vedanta | Avoid
On the weekly chart, Vedanta has formed a 3-point negative divergence, indicating weakening momentum despite price increases. The trendline violation confirms bearish sentiment, signalling potential downside. These technical signals suggest a high probability of a correction. Therefore, it is prudent to book profits and wait for a correction of at least 20 per cent from the current price before considering fresh positions. Traders should avoid initiating long positions under current market conditions, as the risk-to-reward ratio is unfavourable, and further downside cannot be ruled out.
Bajaj Auto | Buy | Target Price: Rs 9,000 | Stop Loss: Rs 8,100
Bajaj Auto has experienced a 35 per cent correction from its peak of Rs 12,774, currently trading near the Rs 8,400 level. The stock is holding a strong historical support zone of 8,300-8,400, which dates back to March 2024. Additionally, the RSI is around 32, indicating that the stock is nearing oversold territory and could be poised for a rebound. Given these technical signals, we recommend going long in the Rs 8,300-8,400 zone with an upside target Rs of 9,000. A strict stop-loss at 8,100 on a daily closing basis should be maintained to manage risk effectively. This setup offers an attractive risk-to-reward ratio.
Ambuja Cements | Book Profit
Ambuja Cements has formed a long-legged doji near its 100-DEMA, followed by a bearish candlestick pattern. The daily RSI has dropped below the critical 50 level, signaling weakening momentum and a bearish outlook. These indicators suggest a higher probability of further downside. Hence, it is advisable to book profits and wait for a correction before considering re-entry. On the flip side, a fresh buying opportunity will only arise if the stock closes above Rs 562 on a daily basis, as this would confirm renewed bullish strength and invalidate the current bearish setup.