After Tuesday’s remarkable rebound, investors will monitor the indices’ movement today to judge whether yesterday’s recovery was a dead-cat bounce or a resumption of a sustainable uptrend.
The BSE Sensex bounced back over 900 points from the day’s low yesterday, to end nearly 200 points higher at 58,664.
The NSE Nifty, on the other hand, bounced back from a low of 17,200 to end above 17,500-mark.
On tech charts, the sharp reversal resulted in a bullish candle on daily charts, suggesting further upside from current levels.
That said, the scheduled derivatives expiry of November Future and Option series on Thursday may keep the markets volatile today.
Strength in the US dollar, news flow around rising Covid-19 cases globally, and movement in commodity prices are some of the other global headwinds that may keep investors cautious.
Back home, analysts say the speed of the market rally is going to slow down now as we are entering the next phase of the bull market, which is going to be much more measured and selective.
According to tech charts, five large-cap stocks – Cipla, Maruti Suzuki, UPL, Power Grid and Tech Mahindra are trading in the oversold zone. In the near-term, these stocks will likely witness a sharp rally from the current levels, provided the overall market sentiment stays positive.
Shares of Maruti Suzuki, for instance, are expected to see a 14 per cent rally and the stock may hit Rs 9,000-mark in the near-term.
Those of Tech M and UPL, on the other hand, can see a 9 per cent and 10 per cent rally, respectively. Power Grid and Cipla, meanwhile, may rise up to 8 per cent.
Apart from these large-cap stocks, investors may also consider investing in the recently listed Latent View Analytics’ shares, albeit at lower levels.
The data analytics firms made a strong market debut on the bourses on Tuesday and listed at Rs 530 per share on the BSE, a 169 per cent premium against the issue price of Rs 197 per share.
The firm’s maiden offering had garnered 339 times subscription, making it the most-subscribed initial public offering ever.
Going forward, analysts advise short-term investors to partially book profit as valuations post a stellar listing pop look expensive.
Santosh Meena, head of research at Swastika Investmart, for instance, says aggressive investors should hold on to the stock, while those who played for listing gain should keep a stop loss at Rs 490.
Moreover, analysts say, new investors should wait for correction to buy the stock as Data Analytics is one of the fastest growing areas and Latent View has emerged as a niche player offering services at global scale.