Buy, sell or hold: what should investors do with Elgi Equipment, Praj Industries and GNFC?

Amid the repo rate hike by the Reserve Bank of India (RBI), the Indian market extended losses into the fourth day as benchmarks closed in the red amid volatility. The RBI had raised the repo rate by 50 basis points on Wednesday to control spiraling inflation. The broader Nifty50 and Sensex fell 0.37% and 0.39% respectively as the indices closed at 16,356 and 54,892.49. Following the benchmarks, Nifty midcap and small cap fell around 0.5% and 0.3%.

On a sector basis, real estate, PSU bank, media and real estate advanced in an otherwise negative market, while consumer staples and oil and gas fell the most.

“RBI has become realistic in withdrawing its dovish stance, realizing the need for early action and raising the inflation forecast by 100 basis points to 6.7%, said Vinod Nair, head of research at Geojit Financial Services.

“On the positive side, there were some bright spots like no increase in CRR, economic growth was kept healthy at 7.2% and no additional measures were announced to reduce liquidity in the banking system. However, the focus has shifted to the global market, which anticipates hawkish Fed policy, starting next week,” the expert added.

Meanwhile, some stocks came into sharp focus on Wednesday. These stocks are Elgi Equipment, Praj Industries and GNFC. Elgi Equipment closed with a gain of nearly 5%, Praj Industries ended up more than 4% and GNFC was down more than 5% on Wednesday.

Here’s what Santosh Meena, Head of Research, Swastika Investmart Ltd, suggests investors do with these stocks.

Elgi equipment:
The meter is in bullish momentum and is forming a bullish flag formation to continue this upward momentum, where the previous high around 422 is an immediate target level. On the downside, the previous breakout level of 360 is an immediate support level while 350-340 is also a strong demand zone. Momentum indicators are well positioned to support the current strength of the trend.

Praj Industries
The counter has been consolidating in a wide range of 400-300 for over a year where it has been bouncing from the low end of the range, so there is a good chance that it is heading towards the upper end of the range. Any decisive breakout of this range will dictate the future direction of this stock. Right now, 360-370 is a resistance zone.

The meter is showing signs of distribution after a vertical rally where the 200-DMA upside will be immediate support which may coincide with the 560-550 support zone; below, there is a risk of trend reversal. On the downside, 500 will be the next significant hurdle while 680-700 is a critical supply zone on the upside. Momentum indicators are also losing momentum.

(Disclaimer: Opinions/suggestions/advice expressed here in this article are investment experts only. Zee Business suggests its readers consult their investment advisors before making any financial decisions.)