nifty 500 stocks: Red Alert! 136 stocks on Nifty 500 hit 52-wk lows since Dec; RIL, Adani cos in list

Benchmark index Nifty 50 has corrected 10% from its lifetime high touched on December 1, and data showed as many as 136 stocks on Nifty 500 index have hit 52-week lows since then.

Of the 136 stocks, at least 51 stocks have corrected more than 20% since December 1.

Of the 136 stocks, 8 stocks are part of the Nifty 50 index, and these include Reliance Industries, HDFC Life Insurance, Wipro, Tata Consumer Products, Divi’s Laboratories, Cipla, Adani Ports and Special Economic Zone, and Adani Enterprises.

Barring Adani Enterprises and Adani Ports, which were muddled in group-specific issues, the other Nifty 50 stocks have seen double-digit correction since December 1.

The continued selling by foreign institutional investors, who are highly concentrated in index stocks has been one of the major factors driving this underperformance.

Shares of Adani Ports and Adani Enterprises were hit since late January after the massive controversial report against the group was released by US-based short seller Hindenburg Research.

What should investors do?
Volatility in the market is expected to remain in the near term as Dalal Street will eagerly await the US Federal Reserve’s monetary policy decision in the aftermath of the collapse of 3 major banks in the country.

However, analysts recommend staying stock-specific and avoid trading without stop losses.

Following are a few stock recommendations by technical analysts for traders as well as long-term investors.

RIL: According to Mehul Kothari, AVP – Technical Research at Anand Rathi, the stock is currently trading around its make-or-break levels. The level of Rs 2,175 is a very

important support for the stock because if the stock falls below this level it will confirm long-term bear trend. On a breach of Rs 2,175, the stock can drop to Rs 1,800-2,000 levels, he said.

Cipla: The stock is in a strong demand zone. The stock has given a big breakdown on the upside everytime it has approached Rs 850-860. Since April 2021, the stock has approved these levels 6 times. If it moves past these levels, Kothari sees 10-15% upside for the stock, and therefore, recommends against selling the stock.

Tata Consumer Products: The stock is in a corrective mode, but has been largely trading in the range of Rs 660-850. In case of a trend reversal also, one cannot expect fireworks in the counter, as it will face multiple hurdles on the upside. Nevertheless, at the current juncture, this is a better pick in the FMCG space compared to bellwether HUL.

HDFC Life Insurance: The stock has witnessed heavy erosion from the levels of Rs 528 and overall has been in a weak zone with near-term support maintained near Rs 457 levels. For the bias to improve, it needs to cross Rs 496-500 zones to establish some conviction and expect for the stock to rise further, said Vaishali Parekh, VP – technical research at Prabhudas Lilladher. With the RSI hovering near the highly oversold zone, the chances of some recovery cannot be ruled out, she said.

Aditya Birla Fashion and Retail: The stock has eroded much of its gains from Rs 360 levels. At current levels of Rs 215, it has lost almost 40% from the peak zone. The next major support for the stock is near Rs 195. A decisive breach above Rs 225 would slightly improve the bias and further, a move past Rs 238 would signal for the buy to anticipate for further upward move.

Mahindra Logistics: After the decent correction witnessed from Rs 509 levels, the stock has gradually consolidated and has almost flattened out from the slide, with the RSI indicator gradually picking up from the highly oversold zone. So, the chances of a reversal in the near future cannot be ruled out, Parekh said.

A decisive move past Rs 390 would improve the trend and one can think of buying opportunity. The downside support can be maintained near Rs 350-355.

LIC: The stock has witnessed huge erosion right from when it got listed and currently, with a more or less double bottom formation made on the daily charts, the near term support lies at around Rs 560-565 zones. It would need to decisively breach Rs 618 to improve the trend

and anticipate for a further rise in the coming days.

(Data inputs from Ritesh Presswala)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)