Nifty faces heavy sell-off, Dabur India & Infosys among top sell recommendations

The Indian stock market faced significant losses, with the Nifty 50 registering its worst February decline since the Covid-19 pandemic. The index plunged by 5.9% over the month, weighed down by global uncertainties, including concerns over the Trump factor. On Friday, the Nifty ended at 22,124.70, tumbling 420.35 points (-1.86%), while the BSE Sensex nosedived 1,414.33 points (-1.90%) to close at 73,198.10. The market rout resulted in a massive Rs 9 lakh crore erosion in the total market capitalization of BSE-listed companies.

Nifty Outlook: Bearish Trend to Continue

Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C. Mehta Investment Intermediates, analyzed Nifty’s technical charts and highlighted its breakdown below the crucial 22,500 support level. The index opened with a gap-down and formed a bearish Marubozu candle, signaling further weakness. As long as Nifty stays below 22,500, the bearish sentiment is likely to persist. Immediate support is seen at 22,000, followed by 21,850, where the 100-Weekly Simple Moving Average (100-WSMA) is positioned. Traders are advised to adopt a "sell on rise" strategy.

Top Stock Recommendations for Monday

1. Dabur India – Sell Call

Current Price: Rs 496.15

Stop Loss: Rs 515

Target Price: Rs 455

Dabur India has broken down from a rectangle pattern on the daily chart, signaling a strong bearish trend. The breakdown is accompanied by rising trading volumes, suggesting intensified selling pressure. Moreover, the 21-day EMA has crossed below the 50-day EMA, confirming a continuation of the downtrend. The Relative Strength Index (RSI) is also declining, reflecting weak market sentiment. Given these indicators, the stock is likely to remain under selling pressure, with further downside potential in the near term.

2. Infosys – Sell Call

Current Price: Rs 1,703.65

Stop Loss: Rs 1,760

Target Price: Rs 1,570

Infosys has experienced a breakdown from a rectangle channel on the daily chart, indicating a strong bearish setup. This breakdown is reinforced by increased trading volume, showing heightened selling interest. The stock is trading below both Fast and Slow EMAs, which are trending downward, further confirming a sustained bearish outlook. With these technical indicators signaling a downward trajectory, Infosys may see further correction in the short term.

Breakdown Stocks: Tata Motors, TCS & Hero MotoCorp Hit 52-Week Lows

Friday’s sell-off pushed several stocks to fresh 52-week lows, including Tata Motors, TCS, and Hero MotoCorp. Here’s how analysts view these stocks:

TCS – Avoid

TCS closed at Rs 3,483.25 after falling 3.58% (-129.30 points). The stock has corrected 16.26% since February 5, experiencing continuous selling pressure. The RSI is in the oversold zone, and the stock has broken key support levels. Analysts advise avoiding fresh entries, as any short-term bounce is expected to face renewed selling pressure.

Hero MotoCorp – Avoid

Hero MotoCorp ended at Rs 3,681.10, declining by 2.09% (-78.45 points). Since February 1, the stock has dropped 18.78%, forming a Three Black Crows pattern on the daily chart, indicating persistent bearish momentum. With rising volumes and key support levels breaking down, the stock remains weak. Analysts suggest avoiding fresh positions as any rebound could trigger more selling.

Market Outlook: Caution Advised

With Nifty struggling to hold support levels and several stocks hitting 52-week lows, traders should exercise caution. The bearish sentiment is likely to persist, and experts recommend a "sell on rise" strategy until clear signs of recovery emerge.

Disclaimer: Investors are advised to do their own research before making any trading decisions.