Avoid aggressive longs at higher levels; Titan, Infosys top buys: Gaurav Garg

The support for Nifty is now placed at 11100 and 10880. The resistance for Nifty is placed at 10370 and 10430. However, traders should avoid aggressive longs at higher levels.

August 18, 2020 / 09:10 AM IST
 
 
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For the upcoming week, Nifty’s trend is likely to remain range-bound with a positive bias, and if Nifty sustains 11,250-11,300 levels then it can further move towards 11,550-11,600, Gaurav Garg, Head of Research at CapitalVia Global Research Limited, said in an interview with Moneycontrol’s Kshitij Anand.

Edited excerpt:

Q) Nifty closed mildly in the red. What fuelled the price action on D-Street? Although the index moved in a range as gains were capped around 11,350 levels?

A) After four days of consolidation, Nifty50 failed to sustain the level of 11,300 as it witnessed profit booking at higher levels and closed on a negative note for the week.

However, the Nifty managed to close above its trend line support formed on 14 August 2020. The major factors driving Nifty’s rally during the early week were positive global cues, better earnings than expected, and demand resumption due to economic recovery post lockdown.

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Q) How is the coming week likely to pan out for investors? What does the technical suggest? Important levels which traders should watch out for?

A) The Nifty50 has been respecting its rising support trend line by connecting all the recent swing lows and is holding above the 200-day EMA.

For the upcoming week, Nifty’s trend is likely to remain range-bound with a positive bias. If Nifty sustains 11,250-11,300 levels then it can further move towards 11,550-11,600.

The support for Nifty is now placed at 11100 and 10880. The resistance for Nifty is placed at 10,370 and 10,430. However, traders should avoid aggressive longs at higher levels.

Q) Sectorally, capital goods, industrial, and auto were among the top gainers in the week gone by. What is driving the rally in these themes?

A) The resumption of economic activity due to the easing of lockdown norms is one of the major factors driving the rally in these sectors.

The demand recovery has been higher than expected in the auto sector post lockdown. Within the auto sector, the tractor segment has surprised with good numbers amidst good monsoon.

Q) Mid & Smallcaps outperform on most of the choppy days. Does it look like investors are chasing growth in a volatile market?

A) The recent correction in the mid and small-cap space is providing investors an opportunity to build their portfolio for the long term.

Investors rebalancing their portfolio as per their risk appetite can be one of the reasons for the outperformance of mid and small-caps.

The Midcap index has lesser exposure to the financial sector than the large-cap index. This might be one of the main reasons for the outperformance of this space on most of the choppy days. Therefore, the diversified category will be a better solution for investors.

Q) Please give the top 3-5 trading ideas with a time horizon of 3-4 weeks?

A) Here is a list of stocks which could deliver up to 17 percent return in the next 3-4 weeks:

Titan Company: LTP: Rs 1102| Buy above Rs 1,120 | Target: Rs 1,199 | Stop Loss: Rs 1,047 | Upside 8%

This stock has formed a Doji pattern on its weekly charts. It has near term support placed at Rs 1,045 and is indicating a reversal from its support level on its daily charts.

Also, the stock is trading above its important moving averages and it seems bullish bias is likely to continue in the near future. We recommend initiating a long position above Rs 1,120.

Infosys: LTP: Rs 953 | Buy above 987 | Target: Rs 1040 | Stop Loss: Rs 938 | Upside 9%

This stock has formed an insider pattern on its weekly charts. It is trading above its important moving averages and it seems that the bullish bias is likely to continue in the near future. We recommend initiating a long position above Rs 987 with a stop loss below Rs 938.

Shriram Transport: LTP: Rs 686 | Buy above Rs 731 | Target: Rs 805 | Stop Loss: Rs 660 | Upside 17%

This stock has formed a Doji pattern on its weekly charts. It has near term support placed at Rs 635. The resistance for this stock is placed at Rs 820. It also has a trend line breakout in its daily charts. We recommend initiating a long position above Rs 731.

Avenue Supermarts: LTP: Rs 2,178 | Buy above Rs 2,220 | Target: Rs 2,295 | Stop Loss: Rs 2,149 | Upside 5%

This stock has closed on a positive note for the fourth consecutive session in its weekly charts. It is trading above its important moving averages and is indicating a reversal pattern in its weekly charts.

The resistance for this stock is placed at Rs 2,300. We recommend initiating a long position above Rs 2,220.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Kshitij Anand is the Editor Markets at Moneycontrol.
first published: Aug 18, 2020 09:10 am

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