Stocks to buy or sell for short-term: Jay Thakkar of ICICI Sec suggests these three shares in F&O segment

Stock market today: The domestic benchmark indices, Nifty 50 and Sensex, could keep their recent upswing going for a third consecutive session on Wednesday, though investors were cautioned ahead of the US Federal Reserve’s policy announcement. At 13:23 IST, the Nifty 50 was up 0.4% at 22,925.35, while the Sensex rose 0.28% to 75,514.17.

Market analysts indicate that investor sentiment in Indian markets appears positive as major global markets have shown favourable trading despite concerns over potential US trade tariffs and other international uncertainties.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed out that an important characteristic of yesterday’s rally was that it was driven by reasonably valued, domestic-oriented sectors such as leading financials. This trend may persist. Stocks that had been previously undervalued in the mid and small-cap categories have also seen a rebound. There remains potential for further growth in this segment, although valuations in the broader market remain elevated. Investors might want to exercise patience until there is greater clarity on the sustainability of the current trend. Domestic-focused themes continue to present reliable investment opportunities.

Market Outlook by Jay Thakkar, Vice President & Head of Derivatives and Quant Research, ICICI Securities

Nifty 50

Nifty 50 has provided a breakout from the sideways consolidation and it closed well above its previous swing high of 22,677 levels indicating further short covering in the Index. There was significant short covering in the last trading session and the net shorts in the Index has reduced from 171,884 contracts to 141,111 contracts as well as after almost a month there was buying by the FIIs in the cash segment as well which further indicates that there is a higher possibility of a short-term uptrend.

The PCR in this weekly series has improved significantly and it has been in favour of the bulls as it is now at 1.42 with highest call OI at 23,000 strikes, hence that will be the upper end of the range whereas 22,500 has the highest put OI, hence that is immediate support at the lower end. So, the range for this week is 23,000 to 22,500 and we maintain our bias sideways to positive in anticipation for further short covering as well as further participation from the broader markets.

Stocks To Buy in the near-term – Jay Thakkar

Jay Thakkar of ICICI Securities recommends buying CDSL Futures, Kotak Mahindra Bank Futures, and Bajaj Finance Futures.

Buy CDSL Futures atRs 1,139 with a stop loss of ₹1,090 for the targets of ₹1,200 and ₹1,240

Most of the stocks in the Nifty 50 Capital Market sector are witnessing short covering due to sharp recovery in the Markets. CDSL was introduced into the derivatives segment and since then the stock witnessed short built up as the prices corrected sharply since then and the OI went up. Now, with the recovery in the markets CDSL which has a higher market share is also likely to witness short covering in the near team. The PCR is at 0.41 levels which is quite oversold, however, there has been some put additions at the lower levels at 1100 and 1120 strikes hence these range will act as a support whereas 1200 call has highest CALL OI hence that is the first target. The stock is trading above its max pain level of 1100, hence till 1090 levels are held the probability of a short covering is high

Buy Kotak Mahindra Bank Futures at ₹2,050 with a stop loss at ₹1,990 for the targets of ₹2,120 and ₹2150

Kotak Bank has witnessed long built up recently and it has also provided a breakout from a 4 year long consolidating range wherein at 2000 strike there was the highest call OI. Once, 2000 levels were taken off the call unwinding has helped the prices to move higher and now THE PCR has improved to 1.33 with strong put additions along with call unwinding making the up move quite swift.

Buy Bajaj Finance Futures at ₹8,852 with a stop loss of ₹8,650 for the targets of ₹9,100 and ₹9,250

Bajaj Finance Futures has witnessed strong unwinding in the short positions which has helped the stock to breakout from its 4 years long consolidating range. Overall, the BFSI sector has been outperforming the Nifty 50 and Bajaj Finance Futures is trading at its life time high thus outperforming Nifty Financial Services sector as well. The outperformance is likely to continue with the breakout, long additions as well as based on the options activity as there has been clear call unwinding 8,500 to 8,700 strikes and significant put additions indicating that the stock has good support at the lower levels. On the upside 9,000 is an immediate resistance as it has highest call OI, however, the PCR is at 1.04 and with the strong price performance the stock is likely to taken off its near term resistance level.

Disclaimer: The Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 18/03/2025 or have no other financial interest and do not have any material conflict of interest.

The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.