Nifty may test 23,600, says Ajit Mishra; bets on BEML among others

Religare Broking's Ajit Mishra said that the sharp decline has pushed Nifty closer to our initial downside target and support of 23,800. A break below this could extend the correction towards 23,600.

Disclaimer: This article is written by Ajit Mishra, SVP – research, Religare Broking. Views expressed are his own. Readers' discretion is advised.

 

Markets plunged sharply on Wednesday and lost over half a percent amid weak global cues and rising geopolitical tensions. The Nifty opened with a gap down following negative global signals and extended its losses during the session as selling intensified across sectors. However, a recovery in the final hour helped trim some losses, and the index eventually settled at 23,914.45.  The Sensex closed at 76,570.35, down about 0.49 per cent.

 

The decline was largely broad-based. Auto, IT and FMCG stocks were among the major drags, while energy counters bucked the trend and showed some resilience. Broader markets also came under pressure, with the midcap and smallcap indices also declining nearly half a percent, indicating widespread caution among participants.

 

 

Investor sentiment deteriorated sharply after escalating tensions in the Middle East triggered a surge in crude oil prices and heightened global uncertainty.  The spike in oil raised concerns about inflation and global interest rates, which could weigh on emerging markets. Volatility also increased as participants reduced exposure amid fears of further geopolitical escalation.

 

From a technical perspective, the sharp decline has pushed the Nifty closer to our initial downside target and support around the 23,800 level, and a decisive break below this could extend the correction towards the 23,600 mark. On the upside, the previous support level of 24,000 is likely to act as an immediate resistance, followed by the 24,150 hurdle in case of a recovery. Given the heightened volatility and global uncertainty, we reiterate our advice to maintain a cautious stance, keep position sizes light, and focus on disciplined risk management.

 

Stocks recommendations today 

 

BEML Limited | LTP: ₹2,032.4 | Recommendation: Buy | Target: ₹2,190 | Stop loss: ₹1,955

 

BEML maintains a strong bullish structure following a fresh upside breakout, with sustained formation of higher highs and higher lows confirming underlying momentum.  The recent rally is accompanied by rising volumes, indicating strong market participation.  Price remains above key moving averages following recovery from previous lows, while their positive alignment reinforces the prevailing uptrend. Investors may consider accumulating the stock within the recommended buying range for further potential upside.

 

PB Fintech Limited | LTP: ₹1,851.9 | Recommendation: Buy | Target: ₹1,990| Stop- loss: ₹1,780

 

PB Fintech exhibits a robust bullish structure, supported by a decisive recovery from its support zone, coinciding with the 200WEMA. The stock has broken out of a triangular pattern, indicating continuation of the prevailing uptrend. It has also reclaimed and sustained above key moving averages, confirming improving trend strength and renewed buying interest. The recent upside breakout, accompanied by higher trading volumes, further validates the strengthening momentum and indicates healthy accumulation. Investors may consider accumulating the stock within the recommended buying range.

 

Voltas Limited | LTP: ₹1,160.9 | Recommendation: Sell Fut | Target: ₹1,100 | Stop loss: ₹1,190

 

After a prolonged multi-month consolidation, the stock has broken out of its established range on the downside and slipped below its long-term weekly moving average, i.e. 200WEMA. It is now trading below all its key weekly and daily moving averages, indicating sustained weakness in the price structure. The fresh breakdown from the consolidation base suggests a failure to reverse the prevailing trend, increasing the likelihood of further downside. Traders can look for shorting opportunities through futures.