Buy, Sell or Hold—What should investors do with Poonawalla Fincorp, Nazara Technologies and Hatsun Agro Products?

Snapping six days losing streak, the Indian market managed to close in the green despite facing selling pressure in closing hours on Monday. Led by banking and auto stocks, headline indices Nify50 and the Sensex closed higher by 0.38% and 0.34% respectively as the former ended above 15,800 and the latter gained nearly 200 points.  

Nifty continues to consolidate in the narrow range as the benchmark index has failed to give any directional movement, said Rupak De, Senior Technical Analyst at LKP Securities. 

"Sideways pattern may continue as long as Nifty stays within a tight band of 15800 and 16000 on a closing basis. A decisive breakout on either side may induce a decent move in the direction of the breakout," the expert said.  

Outperforming the benchmark indices, Nifty midcap and small cap, which have been under tremendous pressure for the past two weeks, closed higher by more than one per cent.  Meanwhile, amid high level of volatility, India Volatility Index (VIX) settled near 25-mark.  

IT, FMCG, Healthcare and Consumer Durable stocks witnessed maximum selling pressures as indices related to all of these sectors closed in the red, while others sat in the green.  

As per Vinod Nair, Head of Research at Geojit Financial Services, continued selling by FIIs as they chase high yield US bonds restricts the Indian market to hold on to its pull-back rally, despite interest from the domestic investors.  

"Weakness in global equities along with the unfavourable global cues led to heavy selling towards the closing hours, as the investors lacked confidence to take forward their positions. The investors are currently on a risk deleveraging phase, hunting for safe-haven investments," said Nair.  

Meanwhile, certain stocks were in focus based on their recent movement. These stocks were Poonawalla Fincorp, Nazara Technologies and Hatsun Agro Products.  Here is what Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities Ltd suggest what should investors do with these stocks. 

POONAWALLA FINCORP: 

In this month so far till Friday, the stock corrected over 20 percent. On daily and weekly charts, it is consistently forming lower top formation which is largely negative for the poonawalla Fincorp Ltd. After a sharp fall, the stock took the support near 200-day SMA or 215 and bounce back sharply. Despite volatile market conditions, they held a positive stance throughout the day. Technically, the medium-term formation is still on the weak side but continuation of pullback rally is possible, if the stock succeeds to trade above 237. For the momentum traders, 237 would be the key support level. And, if stock succeeds to trade above the same, we could expect continuation of pullback rally up to 270-280. However, below 235 uptrends would be vulnerable. 

Nazara Technologies 

From last couple of quarters, the stock is consistently facing resistance at higher level. It has been consistently forming lower top series formation. After a long correction, eventually the stock took the support near 1050 and bounced back sharply. However, the short texture of the stock is non directional and volatile. For traders, now 1175 would be the important support level. above which, continuation of pullback rally will continue till 1350-1400. On the flip side, below 1150 fresh round of selling possible. As a result, chances of hitting 1100-1050 would turn bright. 

Hatsun Agro Products 

In this month so far till Friday, the stock has been corrected nearly 20 percent. On last Friday, the stock opened with a negative note and broke the important support of 960. Post breakdown intensified the weak momentum throughout the day. The sharp price correction with strong volume, indicating further weakness from the current levels. In addition, on intraday charts it is consistently holding lower top formation that also supports short term weakness.  As long as its trading below 920 the chances of hitting 800-775 would turn bright. On the flip side, short recovery is possible only after dismissal of 920 above the same, they could retest the level of 960-1010.