ICICI Securities' Jay Thakkar Recommends Stocks for October 26
Market opens cautiously as crude oil prices rise; Thakkar suggests two buys and one sell.
Nifty 50 struggles below 23,000; potential for further decline if crude prices remain high.
Jay Thakkar recommends buying LTM and Dr. Reddy's Laboratories, while suggesting a sell on Oberoi Realty.
Support levels identified at 22,500, 22,000, and 21,700 for Nifty 50.
The Indian stock market is anticipated to start on a cautious note today, facing pressure from ongoing concerns about high crude oil prices and rising geopolitical tensions. In the previous trading session, the benchmark indices saw a decline, with the Nifty 50 index falling below the 22,900 mark. Market analysts, including Jay Thakkar from ICICI Securities, express a sideways to negative short-term outlook unless the Nifty 50 can break past the 23,000 threshold.
Thakkar highlighted that aggressive call writing has shifted the immediate trading range to between 22,500 and 23,000, down from the previous range of 23,000 to 23,500. He warned that if crude oil prices remain elevated, a break below the 22,500 level is likely, with subsequent support levels at 22,000 and 21,700. A close above 23,000 could potentially lead to short covering in the market.
For today’s trading, Thakkar has identified two stocks to buy and one to sell. He recommends purchasing stock futures of LTM and Dr. Reddy's Laboratories, while advising investors to sell stock futures of Oberoi Realty. For LTM, the entry price is set between Rs 4,280 and Rs 4,310, with a target price of Rs 4,450 to Rs 4,550 and a stop loss below Rs 4,230. Thakkar noted that LTM has established a short-term base and could see a rally due to accumulated short positions.
In the case of Dr. Reddy's Laboratories, the suggested entry price is between Rs 1,230 and Rs 1,250, with target prices of Rs 1,300 and Rs 1,350, and a stop loss below Rs 1,180. The stock has outperformed the Nifty Pharma Index, showing bullish trends in futures trading. Conversely, for Oberoi Realty, the entry price is between Rs 1,640 and Rs 1,660, with target prices set at Rs 1,580 and Rs 1,550, and a stop loss above Rs 1,720. The stock has shown signs of weakness, with lower tops and bottoms forming, and increasing short positions.
The implications of these recommendations are significant for investors, particularly in the context of the current market volatility driven by external factors such as crude oil prices and inflationary pressures. Investors are advised to monitor these stocks closely and consider Thakkar's insights as part of their trading strategies. As the market continues to react to global economic conditions, traders will be looking for signs of recovery or further decline in the coming days.
