We saw some recovery in trading on Tuesday, but in the last half hour, we just gave up and are still lower compared to Tuesday. Do you see any support at current levels coming for the benchmark at least?
Rahul Sharma: Yes, so 23,200 is where we focus. 23,200 is an important Fibonacci support for all bull movements or bull markets that we see after the general election results. We got very close at the open today and posted that we saw a bounce back and along with this there was a bullish divergence that occurred on the hourly chart and this is a triple bottom bullish divergence that occurred. So we feel there is a strong case for a pullback, for a bounce back from that level. Whether the rebound is translated into a reversal or not, only time will tell but we feel that 23,200, the risk reward is quite favorable for fresh investment, for fresh entry and I think this is an area where one can look to add to the name available in the bargain list.
So we actually made a list of stocks that we can buy this week, where we feel that the risk reward is preferable and the bounce can be anywhere like in terms of stock performance the movement can be 5% to 10%, while in good terms , the bounce back when it starts can easily be around 800-1000 points from where we are trading.
Any hurdles you can see for the benchmark Nifty and what stocks would you recommend buying at current levels?
Rahul Sharma: Yes, so in terms of the hurdle of 23,800 where is the proper resistance for the Nifty. After crossing, one must open the gate for another. But for now, let’s talk about the immediate level. So, 23,200 roundabouts, plus or minus 100 points, appear to increase. Stocks that look good, so we’ve made a list of seven largecap stocks and seven midcap and smallcap stocks.
So, to name the big ones, Hotel India remains the top choice, namely Vedanta, Infosys, Trent, Bajaj Finserv, ICICI Bank and State Bank of India. So, these are stocks that can do well from a bounce perspective and in the smallcap and midcap space, we like Dixon Tech, we like Inox Wind, Himat Seide, Phillips Carbon Black, Suzlon, Angel One and V2 Retail to name seven stocks in smallcap space. So, this is a stock where we feel the risk reward is preferable, the chart shows that the change is around the corner and if there is any kind of bounce back, I think we see two more days, 300 points in one day, the bounce back can be very fierce. So, we expect that 23,200 is where we should see some recovery in the market.
Another group of stocks that are under pressure, of course, are some of these financiers for all the reactions to the news flow that we’re seeing. So, PFC, REC, PNB, Canara Bank, SBI, all these were down in the trading session. In what financial range would you recommend buying on dips?
Rahul Sharma: We will go with SBI. In fact, it is also on the big cap list. Now, any negative news should be digested or priced in by the end of today’s session.
At around 775, the stock is trading at its 200-day EMA and PSU has relatively outperformed the entire market over the past few days.
So, the relative strength is in this sector which has barred the last seven-eighth trading session where everything went down along with the Nifty. So we feel that at 775, it is a good bet and we can add on a day when there is bad news in the sector and we feel that a bounce back can take us back to 850 odd with no amount. time.
As far as PFC, RECs are concerned, the stock has also taken a beating today. We prefer to wait a few days and post that we will call this. But out of all these places, SBI is the place to go. Once we start moving, maybe we can shift our focus to other names in the sector.
But on the gaining side, you have the Indian Hotel which actually hit a record high in the market used very much. Then Nalco is one of the good ones. Just taking a quick look at the broader market, Amber Enterprises is featured on the list. What do you think of some of these names?
Rahul Sharma: So, Nalco is really good and also in Diwali selection. Stocks can do well, even from these levels they can be bought. Although the stock is up 4% today, we feel we have a long leg. Our target is around 300 at the top. So, one can look to buy at this level and if there is a small dip in the next few trading sessions, one can look to increase. As long as it remains above the 225 mark, the bias remains positive for the 300 target.
And speaking of Indian Hotels, we have been recommending this stock since the last four-five trading sessions. The stock has done very well. We feel that 900 is where the stock is headed for. Look to buy on dips if any and if you hold this stock in your portfolio, it is best to keep it, especially in a negative market, this stock has defied gravity and continues to reach new highs.
