Buy Jyoti Structures, South Indian Bank, IOB: Merani

In CNBC-TV18's popular show Bull's Eye, Nooresh Merani, AMSEC Research shares trading strategy of the day.

Buy Jyoti Structures with a target price of Rs 48 in the day and a short term target price of Rs 55-60, the stop loss to be placed at Rs 42. If we look at the stock the last time in December-January it made a base around Rs 35-38, again in the current fall it made a base around Rs 38 levels. So we have a double bottom and the levels of Rs 38-40 has been a very strong support for the last many months. The base has been created as well as over the last three days we are seeing huge volumes and price movement which indicates the breakout is confirmed and we could expect a move to Rs 55-60 similar to the highs which it made in February. Buy South Indian Bank with a target price of Rs 26.50 in the day and a stop loss to be placed at Rs 24. The stock has been consolidating for the last few weeks. It had a lot of tops around Rs 24-24.50. I expect all the PSU banks as well as the smaller private banks to outperform. South India Bank seems to be one of the best bets in this category and one can accumulate the stock at Rs 25 levels. Buy Dena Bank with a target price of Rs 108 in the day and a medium target price of Rs 120 plus, a stop loss to be placed at Rs 96. The stock is making a good cup and handle formation with a breakout at Rs 103-103 levels. These levels have been tested for the last three times post the January run-up. I would expect the stock to give a very sharp move once it starts trading above Rs 103. My intraday target price would be Rs 108 although a medium term target price would be Rs 120. Buy Indian Overseas Bank with a target price of Rs 90 and a stop loss at Rs 84. The stock has corrected heavily in the current correction and is very close to the near term bottoms. From the current levels the downside could be limited to Rs 80-84 but we would expect upside to almost Rs 100 in the short term. Yesterday the stock has given small channel breakout which could give us a target price of Rs 90 in extreme short term. Buy at current levels with a stop loss at Rs 84 on a closing basis.