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2 top stock recommendations from Sneha Seth
Despite the gloom, technical indicators suggest the market may be approaching an important inflection point. Speaking on ET Now, Sneha Seth, from Angel One highlighted that the broader market is hovering near a crucial support zone.
“So overall, if you see, the market has corrected, yes, but at this point in time we are close to a very strong support zone placed around 25,700–25,720. That is the support zone for now, which also coincides with the 89 AMA on the daily chart,” Seth said.
She pointed out that options data shows call writers have been particularly active, making the latter half of the session critical. According to her, even a close around current levels could set the stage for an interesting follow-up move.
“If we close around this zone, the follow-up move would be very interesting because we are just near a very important support zone in Nifty as well and in the banking index as well. If you see, the PSUs are moving, and if you see the banking index, it is near the support zone of the 20 DMA. So from here on, the possibility of recovery is quite high,” she added.
Given this setup, Seth advised traders to be cautious with bearish bets. “I would avoid it. If someone has taken a short position, they can square off their position, and someone who is looking to take a contra bet can think of adding some long positions in Nifty for now,” she said.
On stock-specific opportunities, Seth said she continues to favour select PSU and auto names. “From the PSU space, we are liking SBI. If you look at the chart structure, we have seen a decent move, some profit-taking, and again the stock has come towards a very good support zone around 995–1,000. That is the support zone for this counter,” she explained.She expects State Bank of India to perform well from these levels. “Looking at the overall chart structure, SBI can do well at this point in time, and we can expect a strong up move above the recent highs even. Keeping a stop around 994, it is a buy, and the target should be around 1,030–1,035,” Seth said.
Another stock on her radar is Ashok Leyland. “This counter has given a very strong up move and has a very strong chart structure above all the key moving averages. I believe we can see follow-up buying at least towards 195–197, which is the level I am watching,” she noted, adding that options data shows unwinding in the 190 call, a development she termed “very interesting”. She suggested a stop loss around 185 for long positions.
Meanwhile, sectoral volatility remained high, particularly in capital goods, infrastructure and power stocks, which have been under pressure since reports emerged that Chinese firms may once again be allowed to bid for government contracts.
Seeking clarity on this space, ET Now observed that while uncertainty persists, the news flow has triggered sharp swings in related stocks.
Responding to this, Seth said she does not expect a sharp downside from current levels. “Overall, I believe we are seeing some profit-taking for the second consecutive session today, but I am not expecting a major fall at this point in time,” she said.
She suggested that investors focus on relatively stronger pockets of the market rather than chasing volatile themes. “I would actually try to focus on areas where we have seen a decent fall. If you focus on the major indices like Nifty and Bank Nifty, those are at very good levels, and I would prefer buying these counters,” Seth said.
She also reiterated her preference for PSU banking stocks. “PSU banking stocks have been doing quite well and are quite stable, so one can focus on that space rather than focusing on something which may remain under pressure for a day or two,” she said, adding that she is not expecting a major up move in capital goods and infrastructure in the near term.
According to her, autos and PSU banks currently offer relatively better risk-reward. “What sector looks good is auto, and apart from that, the PSU banking index looks good at this point in time,” Seth concluded.
As markets grapple with sustained selling pressure, all eyes will now be on whether key support levels hold and provide the base for a technical rebound in the coming sessions.
