Buy, Sell or Hold—What should investors do with JK Lakshmi Cement, Vijaya Diagnostic Centre and Manappuram Finance?

The domestic equity market closed in the red for the second straight day amid massive sell-off in IT, Metal stocks on Thursday. Benchmarks Nifty50 and the Sensex ended with more than two and half per cent cuts as profit booking amid fears of rate hike by central banks in view of rising inflation weighed on the Indian market. Headline indices closed at 15,809 and 52,792 as all stocks, except ITC, Dr Reddy's and PowerGrid, declined on the benchmarks.  

"The recent earnings reported by the US retailers reflected the heat of high retail inflation, resulting in a rout in Wall Street. Persistent offloading by foreign investors along with mounting fears of an economic slowdown wreaked havoc in the domestic market," Vinod Nair, Head of Research at Geojit Financial Services. 

Meanwhile, in the broader market, Nifty midcap and small cap settled lower by 2.9 and 2.6% respectively as India VIX approached 25-mark. 

Sector-wise Nifty IT declined 5.7%, Nifty metal over 4% as all other sectoral indices slipped in the red. 

Meanwhile, certain stocks came in focus in a highly volatile market on Thursday. These stocks were JK Lakshmi Cement, Vijaya Diagnostic Centre and Manappuram Finance. JK Lakshmi Cement closed with over 7% gains, Vijaya Diagnostic Centre dropped nearly 10% and Manappuram Finance shed over 9% on Thursday.  

Here is what Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas, says what could be expected of these stocks in the short-term to medium term.  

JK Lakshmi Cement: 

The stock saw a sharp reversal on May 19. The price reversal is accompanied by strong volumes, which increases its sustainability to higher levels. On the daily chart, the stock has formed a higher high & a higher low, which is a positive sign as per the Dow Theory. The daily & the weekly momentum indicators have been showing positive divergence, which is adding to the bullish developments. Thus, the stock is set for a bounce back from short-term as well as medium term perspective. 500 & 540 will be the targets on the upside. 

Vijaya Diagnostic Centre 

The stock had a sharp fall in the beginning of May, which was followed by an equally sharp recovery subsequently. On the higher side, it faced resistance near the zone of multiple swing highs formed during March – April period, which were in the range of 475-480. The daily upper Bollinger Band was also present in this zone. Thus, the stock stumbled near these multiple parameters & has slipped below the key daily moving averages. Structurally, it can dip again towards 380-370 levels, where it is expected to attract buying support.  

Manappuram Finance 

The stock has been sliding down for quite some time. It has been on a downtrend in multiple time frames. Channel study shows that the fall that started from November last year is developing in a downward sloping channel. The stock is moving towards the lower end of the channel, which coincides with a long-term rising trendline near 88-90 zone. Thus, this is a crucial support zone, where we can expect the selling pressure to get absorbed. Post that the stock can attempt a bounce towards 105-110