Chartist Talk: Milan Vaishnav recommends 2 stocks despite a challenging week for Nifty 50

The current week is likely to be a bit challenging. On one hand, we have markets poised for a sharp move in either direction. On the other hand, we have a slightly dicey global trade setup once again.

For the current week, I would prefer sticking to large caps. I am looking at two stocks --Godrej Properties and HDFC Bank.

Godrej Properties

The realty sector is relatively underperforming. However, it is undergoing a strong base formation. It is also at a maximum distance from the center point on the RRG. This means that it has the scope of generating greater alpha than others.

HDFC Bank

While Bank Nifty is likely to remain relatively stronger than the Nifty, I expect a good move in this stock as it gets ready to move out of the range that it has been trading in over the past several weeks.

Both these stocks deserve a portfolio-level inclusion.

Do you expect further upside in CDSL and SBI in the coming days?

Yes, I expect further upside in both CDSL and SBI. CDSL is breaking out from a defined trading range; the lead indicators have already given a breakout. SBI, on the other hand, has resumed its uptrend after a brief consolidation and might move past its prior high.

Do you anticipate a retracement in the Nifty 50 after the rally over the past couple of weeks? What key levels should investors watch?

It needs to be noted that the Nifty is in a large Symmetrical Triangle formation. This pattern has evolved over the past twelve months. Generally, we get a directional move when this pattern is around 70% completed. However, this time, we are now very near the apex. This means that we can expect a sharp directional move on either side any time soon.

Having said this, a lean breakout on the upside will happen only after Nifty takes out 25,600 with a thrust and stays above that. On the downside, the 24,850-24,950 zone is a crucial support area. A clear trend would emerge only above or below the mentioned levels.

Given that Bank Nifty has been a major driver of the Nifty 50’s rally, do you expect some profit booking in the current week?

Not profit-booking as such, but if markets in general struggle, then some consolidation cannot be ruled out. However, if the markets continue to stay buoyant, then Bank Nifty has got some room for itself on the upside.

Do you see Maruti Suzuki gearing up for the next leg of its upmove?

I feel that Maruti may find stiff resistance around its high point, i.e., around the Rs 16,500 level. If a breakout happens, I also feel that it would amount to making just incremental highs, and a clean, fresh uptrend may not happen.

If a breakout occurs in RBL Bank, do you expect it to trigger a sharp upward move?

RBL Bank has already broken out when it moved Rs 280. So long as it stays above the Rs 280 level, which is now support for the stock, it may mark some modest incremental highs.

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