"My two top bets are expected to have a mixed approach. One would be from a defensive space - pharma. I am bullish on Lupin," Milan Vaishnav, CMT, MSTA, founder of Gemstone Equity Research & Advisory Services said in an interview with Moneycontrol.
He expects Lupin to resume its upmove from the current levels and go on to test Rs 2,300-2,350 levels.
Milan’s other bet comes from the FMCG space. A resumption in the upmove is expected in ITC; the stock can test Rs 505-510 levels over the coming weeks, according to Milan who spent nearly two decades in the capital markets.
Are the charts convincing you to bet on Paytm for the medium term?
One 97 Communications (Paytm) has spent the majority of this year on a weak note. However, following the formation of a base near the Rs 350-400 zone, the stock has trended consistently higher over the past few weeks. It has approached its strong resistance level which is placed at Rs 790. The charts look good; the stock has crossed above its DMAs (daily moving averages) on the weekly time frame. If it can cross above the Rs 790-795 zone, then we can see the extension of the present upmove.
Do you think the August low is crucial for the Nifty 50?
Yes, the August low is definitely crucial for Nifty. The lows formed in August is one of the important pattern support for Nifty. The index has violated the 20-week MA (moving average) as well as the 100-day MA and is staring at the August lows for support. If that level is violated, we might be in for some extended weakness in the markets.
What are your top two bets for the November series?
My two top bets are expected to have a mixed approach. One would be from a defensive space; i.e., Pharma. I am bullish on Lupin. The stock is under sideways consolidation and has been extremely resilient to the general market weakness. Bullish divergences are seen on the lead indicators; volume oscillators show strong accumulation in the stock. Going ahead, I expect Lupin to resume its upmove from the current levels and go on to test Rs 2,300-2,350 levels.
Another bet comes from the FMCG space. ITC is rolled inside the leading quadrant of the Relative Rotation Graph (RRG) on a daily timeframe. On the weekly timeframe, it is inside the weakening quadrant but it is seen improving its relative momentum against the broader markets. The Relative Strength against the broader Nifty 500 is improving and during turbulent times, the stock is expected to offer a good hiding place. A resumption in the upmove is expected in ITC; the stock can test Rs 505-510 levels over the coming weeks.
Is BSE Limited ready for another leg of upward movement beyond the Rs 5,000 mark?
More than Rs 5,000, the level of Rs 4,800 is important for BSE. This is the point which is its immediate high point (rounded off). If Rs 4,800 is taken out, then Rs 5,000 and even higher levels cannot be ruled out.
Do you expect selling pressure to widen in technology stocks, especially TCS and Infosys?
No, I don't expect that. Speaking from a sectoral standpoint, the Nifty IT Index is just seeing a corrective retracement. The same is the case with TCS and Infosys. These two stocks are seeing corrective retracements and have tested their important support. Some moderate selling pressure may persist for some, but I do not expect the selling pressure to widen. In fact, such phases of price action give opportunities to investors to accumulate such high-quality stocks at lower prices.
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