Stocks to buy or sell: Jigar Patel of Anand Rathi says buy NTPC, Cummins India and sell Bajaj Finance; here’s why

Nifty 50, the key index of the Indian stock market, looks set to extend its losing streak to the fifth consecutive month. The index is down 3 per cent in February so far. It has plunged 13 peer cent from its peak of 26,277.35, which it hit on September 27 last year.

Heavy foreign capital outflow, concerns over a widespread trade war between the US and its trade allies, uncertainty over the US Fed interest rate cut amid sticky inflation, stretched valuation of the Indian stock market and weak quarterly earnings of Indian companies have contributed to this market downtrend.

Experts expect the market to remain volatile in the short term due to persisting headwinds. However, amid the current market selloff, several stocks look poised for gains, while several others look ripe for decline.

Buy and sell stocks

Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, recommends buying NTPC and Cummins India stocks for the next two to three weeks. However, he recommends selling the shares of Bajaj Finance. Here's what the expert says:

NTPC | Previous close: ₹326.25 | Target price: ₹360 | Stop loss: ₹305 | Upside potential: 10%

NTPC recently formed a double-bottom pattern with a bullish divergence at the S1 quarterly pivot support, aligning with a previous breakout zone.

This indicates strong demand and a potential trend reversal. The bullish divergence suggests weakening selling pressure, favouring upward movement.

"Based on this setup, we advised a long entry within the ₹320- ₹326 range. The potential upside target is ₹360, while the stop-loss is placed at ₹305 to manage risk," said Patel.

Cummins India | Previous close: ₹2,836.15 | Target price: ₹3,220 | Stop loss: ₹2,620 | Upside potential: 14%

Cummins India recently formed a double-bottom pattern with a bullish divergence at the S1 monthly pivot support, aligning with a previous breakout zone.

This indicates strong demand and a potential trend reversal. The bullish divergence suggests weakening selling pressure, favouring upward movement.

"Based on this setup, we advised a long entry within the ₹2,800- ₹2,840 range. The potential upside target is ₹3,220, while the stop-loss is placed at ₹2,620 to manage risk," Patel said.

Bajaj Finance (BAF) | Previous close: ₹8,396.70 | Target price: ₹7,600 | Stop loss: ₹8,800 | Downside potential: 9%

Over the past three months, Bajaj Finance has surged 34 per cent, rallying from ₹6,451 to ₹8,662.

However, the stock is stalling near the R1 monthly resistance pivot at the current levels, as seen in the chart. A bearish divergence has also emerged, signalling potential downside pressure in the coming sessions.

"Given this setup, we advised a short position in the ₹8,375- ₹8,400 range, with a target of ₹7,600 and a stop-loss at ₹8,800 on a daily closing basis," said Patel.

"If selling pressure intensifies, a reversal toward lower pivot support levels is likely, making this a favourable risk-reward opportunity for downside movement," Patel said.

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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.