Amit Gupta of ICICI Direct said he would remain short on Kotak Mahindra Bank in anticipation of more long liquidation. “My lower target is at 50-day moving average (DMA) of the stock, which is around Rs 645,” he adds.
Gupta told CNBC-TV18, “In Bank Nifty 12,500 remains a very critical resistance. This was the high of December series and the low of the January series. Now, again we have come below this. We are finding lot of resistance whenever Bank Nifty is moving up.”
“Private banking stocks were the previous laggards because they were not able to sustain above the higher levels, long liquidation has started coming and State Bank of India (SBI) also is not helping the cause,” Gupta added.
Gupta also said, “Yesterday, we saw that another long liquidation has started happening in SBI. Now it is coming closer to a good support. Rs 2,180-2,200 may be a good support for SBI because from January 2012 when we look at it, whenever it has fallen, it is forming the higher bottom. So the previous bottom comes closer to Rs 2,100, I do not see it going to retest that immediately and there maybe some bounce possibly around Rs 2,180-2,200. Today is the result, even if it is not good - because I think the stock has come down by almost 11 percent - you may not see the major crack in the stock.”
“I am picking Kotak Mahindra Bank for the short side because the stock had seen a lot of long at the higher band when it moved up. That was closer to Rs 670-695. Almost 25-30 percent of open interest (OI) was added during that range and now when it is not able to hold Rs 670. We are seeing those positions are getting exited from this stock. I will remain short in anticipation of more long liquidation. My lower target is at 50-day moving average (DMA) of the stock, which is around Rs 645 and I will keep my stop loss at Rs 682,” Gupta added.
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