Buy, Sell or Hold—What should investors do with OFSS, Solar Industries and CSB Bank?

The domestic equity market fell for the second day in a row amid volatility on Monday. Benchmark indices Nifty 50 and the Sensex closed lower by 0.67% each as investors' wealth tumbled by over Rs 8 lakh crore in two-day sell-off. Besides global factors, the market was dragged by weakness in small cap and midcap stocks and pressure on banking, metal, media and energy stocks. Nifty midcap and smallcap indices corrected by over 1.5% and 2% respectively on Monday.  

The market continued its downward rally amid lingering concerns over the weakening rupee, global interest rate hikes and tightening lockdowns in China, said Vinod Nair, Head of Research at Geojit Financial Services.  

"The relentless rise in the US dollar index owing to interest rate hikes and rising US treasury yield hammered investor's risk appetite. Strong US jobs data indicated possibilities of faster rate hikes forcing investors to opt for safe-haven assets," he said.  

Among sectors, Nifty IT was the lone sector to see some buying interest as others sat in the red on Monday's closing.  

Meanwhile, certain stocks came in focus on Monday. These stocks were Oracle Financial Services Software (OFSS), Solar Industries and CSB Bank. On Monday, OFSS ended with nearly 4% gains, Solar Industries declined more than 5% and CSB Bank dropped over 8% in a falling market.  

Here is what Jatin Gohil, Technical and Derivative Analyst at Reliance Securities, recommends investors should do with these stocks when market resumes trading on Monday.  

Oracle Financial Services Software (OFSS)  

Recommendation: Buy on dips | Target: Rs4,400 | Stop Loss: Rs3,272 | Time Duration: 3-4 months 

After a higher level of reversal (i.e.36% fall from its peak level-Rs5,145), the stock respected its 200-week SMA and consolidated around that moving average. Bullish divergence on short-term as well as medium-term indicators signals that the stock will soon resume its up-move. On the higher side, the stock will face hurdle around Rs3,700-3,750 zone. A stable move above that zone could take the stock towards Rs4,100 initially and Rs4,400 subsequently. In case of any decline, its prior swing low will act as a strong support point, which is placed at Rs3,272. Fresh long position can be initiated at current juncture and on dips for the probable up-move. 

Solar Industries  

Recommendation: Buy on dips | Target: Rs3,500 | Stop Loss: Rs2,750 | Time Duration: 2-3 Weeks 

The stock resumed its up-move post a higher level of profit booking. Despite high volatility in the market, the stock remained sideways and settled around its life-time-closing high. Major moving averages are sloping upwards. The stock has potential to move towards Rs3,500. On the lower side, the stock will find support around its 50-day EMA, which is placed at around Rs2,750. Fresh long position can be initiated at current juncture and on dips for the desired action. 

CSB Bank 

Recommendation: Buy above Rs235 | Target: Rs290 | Stop Loss: Rs202 | Time Duration: 3-4 Months 

In March’22, the stock tested its 61.8% Fibonacci Retracement level of prior up-move (Rs95.60-374), which was placed at Rs202. Later, the stock oscillated above that level and poised for an up-move. Bullish divergence on short-term as well as medium-term indicators coincides with our view. On the higher side, the stock will face hurdle around Rs235. A stable move above that zone could lead the stock towards Rs260 initially and Rs290 subsequently. In case the stock fails to hold its key Fibonacci Retracement level (which is placed at Rs202) probable up-move will be negated. Fresh long position can be initiated only above Rs235 for the probable rise.