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Ashwani Gujral's top five picks for today's trade
Technical Analyst Ashwani Gujral is bullish on Orchid Chemicals, Punjab National Bank (PNB), Mastek, Zensar Technologies and KPIT Cummins. He advises traders to buy these stocks.
Here is a verbatim transcript of an exclusive interview with Ashwani Gujral on CNBC-TV18. Also watch the accompanying video. Q: How would you trade the Nifty now? Do you play for 5,300-5,400 in the December series or would you adopt a more cautious stance on the Nifty as the new series opens up? A: You can draw a trendline from 4,550, which goes through 4,930 and has an intermediate low in this move itself. That trendline comes around 5,050. So as long as 5,050 hold's up, there is more upside. However, once that goes then short-term traders need to be looking at the short side. When you get a narrow range at the top of a 600 point move, it is not comforting and is losing market breadth.
Unless something drastic happens, it is unlikely that it can cross these levels very easily. It seems very difficult for the market to sustain above 5,100. You would probably lighten up, use half your exposure and keep very tight stops because from here you could have a decline maybe not all the way to 4,550. However, you could go to 4,750-4,800. Q: How would you trade sugar? A: Lot of the good news is in for sugar. Whenever this happens to stocks, like it happened with auto stocks, they tend to move sideways. Therefore, all of these stocks have now clear ranges. Bajaj Hindusthan moves from Rs 200-205 to about Rs 235-240. Shree Renuka is moving in a range of about Rs 215 to about Rs 245. Balrampur Chini comes down to Rs 125 then goes back to Rs 150. So you would much rather concentrate on playing ranges than trying to play fresh breakouts here. Q: What about some of the oil stocks like Bharat Petroleum Corporation Ltd (BPCL), Gas Authority of India Limited (GAIL) and Oil India Ltd (OIL)? It doesn't have too much data but these stocks have done pretty well. A: I believe something is going on in the gas space. GAIL is at all time highs. It is always a good sign. It has got support now at Rs 396 and resistance at Rs 440. Gujarat Gas has also done well. BPCL is all time high at Rs 603. If it takes that out then you have another Rs 100 upmove, which is possible in case this dollar trade starts reversing and oil continues to move down. BPCL could be the stock in the oil space, which could do the best of the lot. Oil India does not have whole lot of data. It does not move in large ranges to comment upon. Q: What about the NIIT twins? A: NIIT looks weaker of the two. NIIT Tech looks much better. It could head upto Rs 175-180. Till the market stays above this 5,000-5,050 kind of levels, you will get individual pockets in auto ancillary or metal derivatives. These kinds of midcap stories would work out but overall I don't see much traction on the upside. Q: Would it be difficult to open up a long trade here to play for another 100 points for the Nifty at 5,100? A: The range is 5,050 to 5,110. We have not broken out of 5,110 with any kind of conviction. So it is difficult to open up a long trade. We need to see this range getting cleared with conviction and that is what makes things difficult. If you have to take a long trade, if you get levels near 5,050 that is probably a lower risk trade than trying to go long at this point. Q: Did you have a look at any of these cement stocks? A: Cement is having a kind of a pullback rally and there is nothing significant. For ACC , Rs 700-850 is the range and for Ambuja Cement it is Rs 80 to about Rs 95-96. So it is doing that kind of jig. Probably, some sort of defensive buying is going in now there but I don't think any significant trend is beginning here. Q: Have you been tracking the charts of TV Today ? A: TV Today broadly remains in a sort of a range where if it can stay above Rs 117. Chances are that it may try to get upto Rs 150. Media overall has seen some strength but market has to follow through this strength to continue. So if somebody is holding longs from lower levels then they need to keep a stop of about Rs 110 and watch what it does out there. It is forming a pattern, which shows a longer-term bottom getting formed.
