The broader indices have been underperforming for nearly a year. They have now reached closer to the major support zone but there’s no indication of a reversal yet, Jayant Manglik, President - Retail Distribution, Religare Broking Ltd, said in an interview with Moneycontrol’s Kshitij Anand.
Edited excerpts:
Q: The Nifty broke below crucial support levels in the week gone by. Do you think we could see a dead cat bounce in the coming week?
A: The Nifty50 has been consolidating within 10,500-11,000 for the last three months. Though it made an attempt to surpass the hurdle at 11,000 earlier this month, it failed. Indications are pointing towards further fall in the near future.
The lower band of the consolidation range, i.e., 10,500 will act as immediate and crucial support while it would face hurdle around 10,800-10,850 zone in case of any bounce.
Q: What is your call on small and midcaps that are facing the heat?
A: The broader indices have been underperforming for nearly a year. They have now reached closer to the major support zone but there’s no indication of a reversal yet.
Having said that, it is difficult to predict the exact bottom. Some of quality mid-cap and small-cap counters are now available at a good bargain so investors can accumulate quality stocks with medium to long-term investment horizon.
Q: What is your call on Bank Nifty and rupee?
A: Though Bank Nifty is still holding strong, we are seeing some early sign of exhaustion and that could result in a further decline in Nifty.
Technically, it has crucial support at 26,750 and a breakdown of the same will push the index towards 26,400 in the near future. On the higher side, 27,100-27,200 will be the resistance area.
The rupee has witnessed volatile swings over the last few days on the back of on-going US-China trade talks, volatile crude oil prices, outflows from domestic equities and rising dollar index.
However, going forward it is expected to find support around 71.50/$, from where recovery is expected towards 70.80/$.
Q: Whats are your top stock recommendations with a holding period of 1 month?
A: Here are stocks that could give 5-6 percent return in the short term:
Kotak Mahindra Bank: Buy| LTP: Rs 1,278| Target: Rs 1,360| Stop loss: Rs 1,220| Upside: 6 percent
Kotak Mahindra Bank has been consolidating within Rs 1,200-1,350 range for last two months, after the sharp rebound from the support of Rs 1,000. It’s holding strongly above the support zone of moving averages on the daily chart and looks set for a fresh surge. Traders shouldn’t miss this opportunity and accumulate within the given range.
LIC Housing Finance: Sell February futures| LTP: Rs 443| Target: Rs 418| Stop loss: Rs 454| Downside: 5 percent
Post-breakdown from its month-long distribution phase, LIC Housing Finance witnessed a marginal bounce of late and has reached close to its immediate resistance hurdle of moving averages i.e. (100, 50) EMA on the daily chart.
It has formed a fresh shorting pivot and likely to see fall ahead. We advise initiating fresh short positions in the given range
Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his 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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