We were positive on the IT sector given its strong pedigree, robust business model, high return ratios and reasonable valuations, Rajeev Srivastava, Chief Business Officer at Reliance Securities, said in an interview with Moneycontrol’s Kshitij Anand.
edited excerpts:
Q) The market remained volatile throughout the week with 10,800-10,900 levels acting as a major resistance. What led to the price action on D-Street?
A) The initial weakness tested the support levels of 10,550 and retraced back to close above the 200-Day average at 10,901 levels with a strong move across sectors and stocks.
The broader positive momentum and convergence of the averages have led to a 4-month closing high as the positive price action continued in the IT sector to scale an all-time high with strong results from Infosys, Wipro, and other midcaps IT companies.
Energy and Banking sector follow-up move helped Nifty50 to end with a gain 1.2 percent on a week-on-week basis.
Q) What are the major levels which one can watch out for in the coming week?
A) We continue with our positive stance as on the higher side there is a gap to be filled near 11,250-11,400 levels left in the first week of March 2020.
On the downside, strong support continues to remain near 10,600 levels, below which, one can witness sharp profit-booking in index pivotal.
The focus will be more on banking and financial services as key companies like HDFC Bank, Bajaj Finance, HDFC Life, HDFC AMC, ICICI Bank, Bajaj Auto, and Biocon are expected to announce their first-quarter results for FY21.
Q) What do you make of the recent results which have come out from the IT space? The majority of the stocks hit a fresh 52-week high in the week gone by. What should investors do if they want to invest in the IT space?
A) We were positive on the sector and always maintained a positive stance as the sector has a strong pedigree, robust business model, high return ratios, and reasonable valuations.
But, as we have witnessed a sharp up move over the past few weeks, one should wait for some corrective price action to allocate fresh money and we remain positive on stocks like TCS and Tech Mahindra over the long term.
Q) Twitter Bitcoin hack is something which came out of the blue. A similar scam happens when retail investors, especially the new-age ones, get charmed by the SMS or email promising to give superior returns. Are there any red flags which you want to highlight for traders?
A) We believe investors should not get carried away with spam messages or emails, promising to give superior returns as they deceive the new-age investors who are trying new concepts of investing and trading in markets.
One should trade with the registered brokers or intermediaries and follow a strict process in their investment decisions diversifying their money into various assets regularly over some time.
Q) Top 3-5 trading ideas which traders can initiate in the coming week with a time horizon of 3-4 weeks?
A) Here is a list of top three stocks which can give 10-15 percent return in the next 3-4 weeks:
Divi’s Laboratories: Buy | LTP: Rs 2263 | Target: Rs 2550 | Stop Loss: Rs 2020 | Upside: 12.5%
The stock has completed his one-month corrective phase both price-wise and time-wise trading sideways to positive over the past few days.
On the lower side, the stock has witnessed large volumes with positive price pullbacks and we believe the stock will again resume its uptrend
The RSI cutting upwards from down and the sector in positive momentum confirms an up move from current levels.
Marico: Buy | LTP: Rs 355 | Target: Rs 395 | Stop Loss: Rs 328 | Upside: 10.9%
The prolonged consolidation and huge underperformance could reverse as it has completed his price-wise correction.
Multiple support levels in the range of 320-325 levels would be protected and offer a good risk-reward ratio from current levels.
Daily RSI is trading above 60 levels indicating a bullish set up for the stock having an upper hand.
Siemens: Buy | LTP: Rs 1163 | Target: Rs 1340| Stop Loss: 1015 | Upside: 15.1%
The stock remained sideways after a sharp decline and its key technical indicators on the short-term timeframe have reversed from their oversold zone and given a buy signal.
On the lower side, its prior low connecting support line and its 100-month SMA worked as a key reversal point.
We believe the stock will utilize prior consolidation and will resume its up-move and could lead the stock towards 1340 levels.
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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
