SBI Card, Bandhan Bk: 5 stocks can drop up to 13% if mkt sell-off deepens

Market participants usually opt for mid-cap or small-cap stocks. But, if one fails to pick the right stock, investment in such stocks can result into huge losses

Both the frontline indices, the BSE Sensex and Nifty are clearly witnessing selling pressure as they approached their respective all-time highs. For now, both the benchmarks seem to be struggling their immediate barriers of 62,000 on the Sensex and 18,500 for the Nifty, thus raising concerns over the prevailing optimism. 

So far this year, inspite of the BSE Sensex and Nifty 50 dropping to hit new 52-week lows in July 2022, the benchmark indices were up 5.4 per cent on a YTD (Year Till Date) basis and merely 2 per cent shy from recording new historic peaks. The overall sentiment in the market has been bullish, with participants anticipating the indices to scale uncharted territories in the near term.
 

That apart, the broader market trend has not been equally optimistic. For instance, the Nifty Midcap index was up merely 1.2 per cent on YTD basis, while the Smallcap index had declined as much as 15 per cent so far this year.

In a broader market bull-run, investors tend to prefer mid- and smallcap stocks over largecaps, as historically the former have delivered higher returns in a rising market. However, in case, the investment turns sour, mid- and small-cap stocks also tend to fall faster and account for heavy losses. 

Given the current market scenario, wherein the benchmark indices were facing resistance and hinting of a corrective move, here are few stocks which too are showing signs of exhaustion on the charts. These stocks seem unlikely to continue their upward rise, as they have failed to cross their key hurdles. These stocks could even slip to unexpected levels due to sustained weakness at the counter.

Here’s the technical outlook to these stocks going ahead:- 

Aurobindo Pharma Ltd (AUROPHARMA)

Likely target: Rs 400

Downside potential:  13%

Shares of Aurobindo Pharma have failed to cross and sustain over the 200-day moving average (DMA) since September last year, a key average that investors consider while taking an informed decision. The price action indicates weakness, with stock slipping to fresh lows since then. At present, the immediate hurdle for the stock is seen at Rs 500, and only upon surpassing this mark, the stock could be seen making an effort to retrieve the lost optimism. 

The current negative bias could pull the stock to further lows of Rs 400 as the momentum indicator; the Moving Average Convergence Divergence (MACD) has slipped beneath the zero line exhibiting a weaker strength. CLICK HERE FOR THE CHART

Bandhan Bank Ltd (BANDHANBNK)

Likely target: Rs 200 and Rs 180

Downside potential:  6% to 12%

After experiencing sideway trend where the stock witnessed resistance at Rs 350 level since March 2021, the stock recently breached the lower cushion at Rs 225. This suggests weakness that can lead to more downside pressure in coming sessions. The stock has entered oversold territory, but the bears are not letting price action to see any respite. The next supports are at Rs 200 and Rs 185 levels. Near term hurdles exist at Rs 225 and Rs 240 levels. CLICK HERE FOR THE CHART

SBI Cards and Payment Services Limited (SBICARD)

Likely target: Rs 730

Downside potential:  8%

There is a breakdown of “Head and Shoulder” pattern at Rs 875 level, shows the daily chart. The bearish pattern has engulfed the stock leading to lower lows. The trend is likely to remain fragile as long as the stock trades below Rs 850 level. The next support is seen at Rs 730 level. At the very least, the stock needs some stability to regain the positive bias. CLICK HERE FOR THE CHART

Jubilant Foodworks Ltd (JUBLFOOD)

Likely target: Rs 500

Downside potential:  8%

The stock has plunged 25 per cent so far this year and continues to see increasing selling pressure beneath the 200-DMA set at Rs 566, which it negated few sessions ago. The momentum has turned bearish with the MACD slipping under the zero line. Additionally, the stock has lost the immediate support of Rs 545, further reinforcing the weak bias. The next support for the stock is seen at Rs 500 level.  CLICK HERE FOR THE CHART

Gujarat Narmada Valley Fertilizers and Chemicals Ltd (GNFC) 

Likely target: Rs 500

Downside potential:  12%

A gap-down close that wrecked the 200-DMA support held since August 2020, has forced the stock into a bear trap. The 200-DMA support is presently placed at Rs 655 mark and the stock has tumbled 12 per cent from the same.  Now, the immediate hurdle comes to Rs 600, followed by Rs 625. Any retrieval from the current levels is anticipated to face selling pressure with price taking a turn to Rs 500 level. CLICK HERE FOR THE CHART