F&O Strategy: Buy Can Fin Homes, Cochin Shipyard, Power Grid, suggests Rupak De in a falling stock market today

Stock market today: The domestic benchmark indices, Sensex and Nifty 50, declined on Monday, following weakness in their regional counterparts after US President Donald Trump enacted extensive tariffs on Canada, Mexico, and China, raising concerns about a potential trade war.

The Nifty 50 was down 0.97% at 23,255.05 level as of 11:42 IST, while the Sensex fell 0.76% to 76,916.23. Asian stock markets experienced a downturn as Trump’s tariffs instigated worries about an impact on global growth, with the MSCI Asia ex-Japan index dropping by approximately 3%, as per reports.

All 13 key domestic equity sectors experienced a decline, with small caps and mid caps focused on the domestic market losing 1.9% and 1.3% respectively. At the same time, the Indian rupee fell below 87 per US dollar for the first time as other regional currencies dropped. Among the F&O stocks that are most actively traded, only 56.5% were seen closing above their respective 10-day SMAs on Budget day, compared to 67% on Friday, as reported by analysts.

Technical views by Rupak De, Senior Technical Analyst, LKP Securities on F&O market

Nifty 50

The Nifty 50 experienced significant volatility during the Budget session. On the daily chart, the formation of a small-bodied candle suggests market indecision. The index has support at 23,280, and as long as it holds above this level, the trend is likely to remain positive. On the upside, Nifty 50 may advance towards 23,700–24,000 in the short term. However, a drop below 23,280 could lead to panic in the market.

Open Interest Analysis: The new weekly series kicked off with significant CALL writing, as evident from the second day’s activity in the Nifty 50 weekly options. The net addition to CALL open interest stood at 2.82 crore, compared to a net addition of only 1.2 cr in PUT open interest. Substantial CALL open interest is visible at the 24,000 strike, while maximum PUT open interest is concentrated at 23,000, defining a range for the market.

Strategy: Strong CALL writing 23,500 signifies a level where Nifty 50 might face challenge to cross, a fall below 23,450 might trigger selling pressure in the near term.

Trade: Buy Nifty 50 6FEB 23300PE above 90 Target at 150 Stop Loss at 59.

Technical stock recommendations for the week

Buy Can Fin Homes Ltd at ₹668 | Target: ₹710 | Stop Loss: ₹648

The stock has formed a Piercing Line pattern on the daily chart, indicating a potential near-term bullish reversal. It has also found support at its previous swing low, forming a double bottom. Additionally, the RSI is in a bullish crossover with positive divergence, reinforcing the likelihood of a rebound. Given the technical setup, a recovery is expected, with an upside potential toward 710, while support is placed at ₹648.

Buy Cochin Shipyard Ltd at ₹1,537 | Target: ₹1,670 | Stop Loss: ₹1,478

The stock has broken above a falling trendline (on a closing basis) on the daily chart, signaling a reversal from its bearish trend. Furthermore, it has closed above the 21 EMA, adding to the bullish outlook. The RSI is in a bullish crossover, indicating strong momentum. In the short term, the stock has the potential to move toward ₹1,670, with support at ₹1,478.

The stock has given a falling trendline breakout (on a closing basis) on the daily chart, marking a shift from its bearish phase. Additionally, it has closed above the 21 EMA, further confirming the positive trend. The RSI is in a bullish crossover, suggesting strong short-term momentum. The stock has the potential to reach ₹320, with support at ₹292.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.