Jindal Steel to NTPC - Jay Thakkar suggests 3 stocks to buy or sell for short-term in F&O segment

Stock market today: Indian benchmark indices opened lower on Wednesday, as investors remained cautious amid rising crude oil prices and escalating geopolitical tensions in the Middle East, while June-quarter earnings triggered sharp stock-specific movements.

The Nifty 50 declined 0.41% to 24,089.20, while the BSE Sensex slipped 0.50% to 77,079.37 at 9:22 IST.

Market breadth remained weak, with 10 of the 16 sectoral indices trading in the red. The broader market also came under pressure, with the Nifty Smallcap 100 falling 0.4% and the Nifty Midcap 100 declining 0.2%.

The Nifty Pharma index dropped 1.6% after US President Donald Trump unveiled a phased tariff plan on imported generic medicines, giving pharmaceutical companies a two-year window before higher duties come into effect.

Among individual stocks, Bandhan Bank plunged 10% despite reporting better-than-expected June-quarter earnings, as investors reacted to the lender's lower return-on-assets guidance for the current financial year, driven by expectations of softer net interest margins and higher operating expenses.

In contrast, auto stocks outperformed, with Bajaj Auto rising 4% and TVS Motor Company gaining 3.5% after both companies reported higher quarterly profits.

Nifty 50 closed near the 24,200 level on the day of weekly expiry; however, it is still very much stuck within a narrow range of 24,300-24,000, which has the highest call and put bases on an immediate basis. Beyond this range, there is a broader range of 24,500-23,800.

The India VIX has been trading at the lower end of the range, i.e. 12-13 range, and the recent spike in the international crude oil prices due to escalation in the geo-political tensions in the Middle East can lead to some negative impact on the USDINR, and there is a higher chance of a spike in the India VIX.

The positive thing in the near term is that despite all of these there has been significant slowdown in the FII selling in the equity cash segment as well as the Index shorts positions has also come down and this indicates that there is buying interest at the lower levels and now the markets are less sensitive to the rise in crude oil prices as once there is de-escalation the prices are likely to fall sharply. So, until clarity emerges, the markets are likely to be range-bound, but buying on dips will be advisable as well.

So, above 24,300, it will lead to a breakout; else, one can look to buy on dips near the 23,800 level on a positional basis.

Jay Thakkar of ICICI Securities recommends Jindal Steel Futures, NTPC Futures, and Aditya Birla Capital.

Jindal Steel has paused its recent decline, and there has been positive divergence in the short-term frame, indicating a high possibility of a bounce back due to short covering. There has been significant call activity at each level; however, due to the recent rise in international metal prices, it may benefit the metal stocks in the short term, hence there is a higher risk-reward ratio in this monthly expiry week. The highest call base is at 1,100, hence that is the 1st target and above that, there is no major call base. The max pain is at 1,060, so above that level, the stock is likely to gain further strength.

NTPC has formed a bullish wedge pattern, and with it, there have been many short additions in the near term. With a breakout from this range, there is a higher chance of short covering, which will take this stock to at least 360 and, beyond that, 367, as 367.50 has the highest call base. The max pain is at 350, so above that level the stock is likely to gain further strength.

Aditya Birla Capital has witnessed clear long-term buildup, and there has been a long-term breakout in this stock as well. The stock has been consolidating for a couple of trading sessions, and now it is ready to break out of this range. It has been trading well above 400, its max pain level, which will provide support going forward.

Disclaimer: The Research Analyst or his relatives or I-Sec d...