Stocks to buy: Patanjali Foods, Nykaa and Delhivery on investors’ radar

Stocks that were in focus include names like Patanjali Foods, which rose 0.3% and Nykaa, which declined 1.7% and Delhivery, whose shares dropped 6% on Tuesday.

Here’s what Kushal Gandhi, Technical Analyst at StoxBox, recommends investors should do with these stocks when the market resumes trading today.

Patanjali Foods

The share price of Patanjali has exhibited a prolonged sideways trend, lacking a clear directional bias. However, the formation of higher lows on the weekly chart suggests a positive outlook from a price action perspective.The price movement appears to be tightening as it approaches the resistance zone between 1916 and 1885, which was established due to a previous gap down. Despite numerous attempts to break through this resistance, the price action has consistently remained capped, highlighting the significance of this relatively strong barrier.

Currently, while the EPS strength is weak and the price performance relative to the past 12 months is average, there is a noticeable uptick in buyer demand. Therefore, we recommend purchasing the stock upon confirmation of a closing breach of the resistance zone.

Nykaa

The price action of NYKAA initially suggested a promising transition towards a more dynamic phase, indicating a potential uptrend.

However, it has since experienced a decline of over 30% from its 52-week highs, currently trading just below the 50-week moving average and the 200-day moving average. Consequently, the stock has shown deterioration in its EPS, price strength, and buyer demand. From a technical perspective, the stock lacks positive momentum, as evidenced by the RSI across daily and higher timeframes remaining below median levels, with no divergence from price action.

Given that the price is trading below key moving averages and has recently experienced a negative crossover, we advise against purchasing additional shares of NYKAA until it decisively reclaims the 200 DMA, which is currently trading around the 180 levels.

Delhivery

The share price of Delhivery continues to exhibit bearish implications as the price action consistently trades lower, showing diminished relative strength in comparison to the benchmark index, Nifty50.

Recently, the price movement demonstrated a breakdown from an inverted cup and handle pattern, which suggests a continuation of the prevailing bearish primary trend—this represents a negative development for the stock.

Furthermore, the security exhibits a lack of positive price momentum, earnings per share (EPS) strength, and buyer demand, contributing to its classification as a weak investment option. Therefore, we advise against the acquisition of shares in this company.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)