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Investors’ selling pressure was evident in today’s session as the benchmark index ended the day 0.48% lower at 19,253.8 and most of the sectoral indices closed in the red zone. Despite positive global cues, the Indian markets closed at the lowest level in the last 50 rolling days.
If this wants you to add some short trades to your portfolio, here’s a list of two probable candidates.
Bharat Petroleum Corporation Limited
Bharat Petroleum Corp. Ltd. (NS:) or BPCL is an oil marketing and refining company with a market capitalization of INR 76,106 crore and trades at a TTM P/E ratio of 4.02. Shares of all OMCs are falling as investors’ sentiment turned negative after the government announced to slash the price of LPG cylinders by INR 200 under the Ujjawala plan.
Image Description: Daily chart of BPCL
Image Source: Investing.com
This is expected to put pressure on the profit margins of these OMCs and hence investors are fleeing from them. The stock fell 3.2% to INR 340.55 and closed at the lowest level since April 2023. Looking at the daily chart, there seems to be more potential for the fall, probably till the next support of INR 330 – INR 327.
Escorts Kubota Limited
Escorts Kubota (NS:) is a well-known tractor manufacturer with a market capitalization of INR 35,240 crore and trades at a TTM P/E ratio of 44.83. The stock has risen very sharply in the past few sessions and this one-way rally has made it overbought. The RSI (daily, 14) showed a reading of 88.3 in yesterday’s session which definitely calls for some profit booking for swing traders on the long side.
Image Description: Daily chart of Escorts Kubota with the RSI at the bottom
Image Source: Investing.com
Also, today’s selling of 2.8% to INR 3,159.25 translated into a bearish harami candlestick pattern on the daily chart, which is quite a strong reversal pattern. As it has been formed at an all-time high, the mean reversion from here can potentially drag the stock to INR 3,000, at least.
In case you want to connect with me, reach out on Twitter. My handle is – aayushxkhanna
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