On the downside, 11,250 should now act as a crucial support and in case of any decline traders should continue with “buy on dips” approach till it holds above this support, Jayant Manglik, President, Religare Broking Ltd, said in an interview with Moneycontrol’s Kshitij Anand.
Q) Indian markets closed the volatile week on a positive note. The Nifty held on to 11,400 levels. How is the technical setup looking for the index? What are the crucial levels to watch out for next week?
A) Technically, Nifty looks strong on the charts but requires sustainability above 11,525 for further upmove else we might see extended consolidation.
On the downside, 11,250 should now act as a crucial support and in case of any decline, traders should continue with “buy on dips” approach till it holds above this support.
Q) How is rupee looking on technical charts?
A) The rupee has closed below the 70 mark against the USD for the first time ever and it seems this is the new normal. The rupee has been on a declining trajectory and has lost around 10 percent this year.
On the technical charts, the rupee is trading well below its 50-days moving average and the recent breach below the crucial support of 69.20 mark has opened up the risk of further downside.
Though being in oversold territory, there may be some respite towards the 69.60 mark, but the larger trend suggests a bearish bias.
After a small pullback, the domestic currency will again edge downhill towards the 70.90 mark and a cut through this level could even push it towards the 71.50 level.
Q) Small & midcap stocks have picked up momentum which was not visible in earlier rallies. Do you think that the recovery has begun in this space?
A) Yes, we’ve seen a decent recovery on the broader market front and expect this to continue going forward also.
However, the participation is limited mainly to the fundamentally sound counters, thus traders and short-term investors should focus more on stock selection and avoid venturing into any random stock, especially penny stocks, in anticipation of a rebound.
Q) Top three-five stocks (with rationale) which investors can look at with a holding period of 1 month?
A) Here is a list of top three stocks which could give 9-13% return:
Sun Pharma: Buy| LTP: Rs 623.50| Target: Rs 700| Stop Loss: Rs 590| Return 12%
We have seen multiple positive developments in the pharma space of late and Sun Pharma too participated in the move. It surpassed the hurdle of long-term averages on the weekly chart and gained nearly 12 percent.
The chart pattern is clearly indicating a strong up move to follow. The stock can be accumulated in the range of Rs 615-625 with closing below stop loss below Rs 590 and a target of Rs 680-700.
DHFL: Buy| LTP: Rs 670.35| Target: Rs 760| Stop Loss: Rs 630| Return 13%
It has been consolidating in a broader trading range of Rs 500-680 for the last eight months, after a failed attempt to surpass the hurdle of a record high.
Now, it has reached closer to the upper band of this consolidation range and is likely to witness a breakout from the same in the near future.
The opportunity shouldn’t be missed and thus the stock can be accumulated in the range of Rs 665-674 with a stop loss below Rs 630 and a target of Rs 760.
L&T Finance Holdings: Buy| LTP: Rs 181.75| Target: Rs 198| Stop Loss: Rs 175| Return 9%
L&T Finance has been consolidating for the past three weeks while holding firmly above its crucial support level of multiple moving averages.
Besides, it’s also trading on the verge of a breakout from the Flag pattern (indicates a pause) on the daily chart. We advocate buying within 180-183 range with a stop loss below Rs 175 and a target of Rs 198.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol are his own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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