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Last Updated : Feb 18, 2020 08:32 AM IST | Source: Moneycontrol.com

Hot Stocks: 'Use rally in PSU bank and auto stocks to create fresh shorts'

We advise focusing on defensives such as IT, Pharma and FMCG and select private banking majors for long trades

Moneycontrol Contributor @moneycontrolcom
 
 
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Ajit Mishra

The market traded volatile last week and settled almost unchanged amid mixed cues. The sentiment was downbeat in the beginning amid concerns of coronavirus' impact on the global trade and subdued quarterly earnings.

Much to the participants’ relief, reports that the epidemic is showing signs of slowing down and it might end by the April month triggered rebound across global markets in the middle of the week.

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However, weak macroeconomic data again turned the market cautious which resulted in profit-taking in the last two sessions.

Finally, the benchmark index Nifty, settled at 12,113.45, up by 0.12 percent for the week.

Since the earnings season is now behind us and there is no major domestic event, global cues will dictate the market trend.

The market is closely eyeing the developments on the coronavirus front and that will remain on the traders’ radar.

This week is a holiday-shorted one and we expect Nifty to consolidate further within 11,900-12,300 zone. We’re seeing mixed trend on the sectoral front and that might continue going ahead.

We advise focusing more on defensives such as IT, Pharma and FMCG and select private banking majors for long trades while any rebound in the PSU banking and auto can be considered to create fresh shorts.

Here is a list of top three stocks with a holding period of 1-4 weeks:

Dr. Reddy's Laboratories | Buy | LTP: Rs 3,293.60 | Target : Rs 3,380 | Stop loss: Rs 3,230 | Return 2.6%

Dr. Reddy's has been gradually moving up for the last one and a half year, after retesting the support zone around Rs 1,900 levels.

It has recently posted a fresh breakout from a two-week-long consolidation phase and now looks all set for the fresh surge.

The recent buoyancy in the pharma pack is an added positive. We advise initiating fresh longs in the given range of Rs 3,275-3,285.

Cipla | Sell | LTP: Rs 431.70 | Target: Rs 415 | Stop loss: Rs 450 | Downside: 4%

We are seeing a mixed trend in pharma space and Cipla is trading with a negative bias. It made multiple attempts to surpass the resistance zone of 200-EMA on the daily chart but in vain.

Further, in continuation of the prevailing downtrend, it has witnessed a fresh breakdown from a consolidation range on February 17. Traders are advised to create fresh shorts in the zone of Rs 437-440.

NTPC February Futures | Sell | LTP: Rs 110.25 | Target: Rs 104 | Stop loss: Rs 117 | Downside 6%

NTPC has been underperforming for the last several years and there’s still no respite. It is currently struggling below the resistance zone of moving averages ribbon on multiple time frames.

It has recently tested the resistance zone of 100-EMA on the daily chart but couldn’t surpass the same and that results in the formation of a fresh shorting pivot. We suggest initiating shorts within the mentioned zone of Rs 112-114.

(The author is Vice President, Research, Religare Broking)

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Feb 18, 2020 08:32 am
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