Stock market: Discussing market technicals and his favorite trade ideas, Rahul Sharma, Director and Head of Research, JM Financial Services said that we are going through the last phase of our pain period. We may see relief in the coming eight to ten trading sessions. It is worth noting that Reliance has outperformed in the new phase of recession that started from December 13. In the earlier phase, Reliance had put pressure on Nifty. But the good thing is that Reliance has outperformed in the last one month. Short covering has been seen in this stock. This seems to be supporting the stock market. This is a good thing for the market. Nifty can make a comeback by making a bottom from the panic low around 22700-22800. In the recovery coming from here, Nifty may be seen reaching the level of 24500-25000 before the budget.
Rahul’s advice to positional traders is to buy in Nifty whenever it falls 400-500 points in the next 5-7 days. If you are a short term trader then trade with puts in this decline. Buy a put option of Rs 23000 with monthly expiry. The risk-reward of Nifty is getting better for long positions. Budget will be an event that will boost the market.
Rahul further said that in future we can see Reliance doing leadership. After the results, this stock has been seen crossing the registration of 13000. Gradually we may see Reliance rising till Rs 1400. In the coming time, Reliance may see a rise of up to 125 points. If you have a 1 month perspective then buy into Reliance.
Rahul says that earning can be done by taking sale deals in IT shares. Support of Rs 8500 has been broken in Coforge. Below, targets up to Rs 8200 can be achieved in this stock. This stock can be shorted with a stoploss of Rs 8656. Or you can buy it in 8400 put option. It would be advisable to take a long-short approach in the market at this time because it is still not out of trouble. Further decline may be seen in IT in the coming trading sessions.
Talking about capital goods, Rahul said that from the budget point of view, Larsen & Toubro looks good. The stock has made a double bottom. The stock has not yet broken its November low. If you want to invest from here with a perspective of 2-3 months then buy this stock. Its setup looks quite good. This stock may be seen going above Rs 4000 in the coming quarter.
Among chemical stocks, Rahul sees potential in Naveen Fluorine. He says that sooner or later we will see this stock also going above Rs 4000. After this, the level of Rs 4500 is also possible. Rahul’s advice is to buy this stock in gradual installments.
Bank Nifty has become the arena for big players based on Algo, stay away for some time, if you are stuck in Vi then come out in the rally – Anuj Singhal
Rahul likes Bajaj Twins in NBFC shares. He says that there is relative strength between these two stocks. Bajaj Finance has made a very good base. A breakout may be seen in this stock in the next 10-15 days. Rahul has a buy recommendation for this stock with a target of Rs 7700. Apart from this, Rahul also recommends positional buying in escorts. Within the next 2-3 weeks, a golden crossover may be seen in this stock and this stock may again be seen moving towards Rs 4000-4200. For long position in this stock, set a stoploss of Rs 3400.
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