Five Sensex stocks have shed over 30% since Oct 2021. Time to bottom fish?

Top 10 Sensex losers have tanked over 20 per cent, while 5 among these have plunged over 30 per cent since October 2021

The Indian equities have seen a spectacular rally post March 2020 with benchmark indices, BSE Sensex and Nifty 50, soaring almost 150 per cent from their Covid-19 lows of 25,638 and 7,511 respectively. 

While the Sensex hit a historic peak of 62,245 and Nifty 50 at 18,604 on October 19, 2021, the trend has been negative since then. So far, both the indices have dropped 16 per cent from their respective peaks and trade with extreme distress.

The descent could be attributed to global uncertainties that linger around Russia invading Ukraine, escalating crude prices, mounting inflation, and tightening monetary policies. 

While 16 per cent decline in Sensex and Nifty seems healthy, considering the enormous gains of 150 per cent over the last two years, individual stocks like Bajaj Finserv, Wipro, Tech Mahindra, and Bajaj Finance have plunged in the range of 40-30 per cent since October 19, 2021. 

The top 10 losers on the Sensex index have tanked over 20 per cent during the period, and continue to exhibit weakness ahead. Moreover, half of BSE Sensex stocks have tumbled over 15 per cent and only five stocks trade in the positive territory, which include Sun Pharmaceutical Industries, Maruti Suzuki India, ITC, Mahindra & Mahindra, and Power Grid Corporation Of India.

Here's how the most battered stocks look on charts now:

Bajaj Finserv Ltd (BAJAJFINSV)

Outlook: Not advisable for bottom fishing, wait for decent breakout

The stock has multiple "Death Cross" patterns on technical charts, which indicates a bearish sentiment among market participants. Even though the shares of Bajaj Finserv trade in oversold territory of Relative Strength Index (RSI), the price action is not displaying any reversal. Moreover, the RSI itself has to conquer 45 value to rebuild the upward strength, shows the daily chart. For the moment, the stock is sliding downward with a sense of free fall. Given this, it is not advisable to bottom fish and fresh entries could only be made after a confirmed breakout. CLICK HERE FOR THE CHART

  

Wipro Ltd (WIPRO)

Likely target: Rs 400 (simultaneous close under Rs 450)

Downside potential: 12%

The recent plunge in the stock price under 200-day moving average (DMA) has built consecutive resistances, according to the daily chart. Now, Rs 500 and Rs 550 have become critical obstacles on every up move. Though the trend is weak and on the threshold of further slide, a minor bounce cannot be neglected. A simultaneous close under Rs 450 could mean a downside towards Rs 400 levels. CLICK HERE FOR THE CHART

ALSO READ: Market's wild ride evokes memories of trading before Lehman blowup

Tech Mahindra Ltd (TECHM)

Outlook: Rs 1,000 becomes a crucial mark

While there was a positive divergence on RSI, on the daily chart, the price action failed to materialize into an upmove. Now, with a fresh low, the stock hints at more downside. That said, Rs 1,000 remains a key turning point. As long as this mark is upheld, the counter could hold the ground and may develop some positive bias. The next support comes at Rs 900, which is its 200-weekly moving average (WMA). Resistance comes to Rs 1,200 level. CLICK HERE FOR THE CHART

Bajaj Finance Ltd (BAJFINANCE)

Likely target: Rs 5,000 and Rs 4,500

Downside potential: 8% to 16%

Bajaj Finance broke its major support of Rs 6,000 and is headed towards Rs 5,000 and Rs 4,500 (its 200-WMA) levels, shows the weekly chart. On the higher end, the stock needs to take out the obstacle of Rs 6,000 decisively to embark a new trend. CLICK HERE FOR THE CHART

IndusInd Bank Ltd (INDUSINDBK)

Outlook: support range of Rs 850 to Rs 750 

Though the stock trades under 200-DMA, set at Rs 977-mark, the price action continues to see buying momentum in the support range of Rs 850 to Rs 750 levels, show daily and weekly charts. Thus, as long as this support range is protected, the counter may resume the upward move. To breakout on the upside, the IndusInd Bank needs to sustain over 200-DMA. CLICK HERE FOR THE CHART