The Nifty has a good support at the 10670 mark. As long as it sustains above the mentioned levels, we maintain our cautious view, says Swati A. Hotkar of Nirmal Bang.
Swati A. Hotkar of Nirmal Bang believes that ahead of the Interim Budget, all market participants remain cautious on the Indices. Sequent Scientific, REC and Asian Paints are the top three buying ideas for a one-month horizon.
Below are excerpts of the interview.
Q) It looks like the market is losing steam at higher levels. 10850-10900 levels are acting as a crucial resistance level for the index. Do you see this as nervousness ahead of the interim budget?
A) From last three to four weeks, the Nifty is facing a strong resistance of 10870-10900 levels, which indicates a cautious view. On every rise, we are witnessing selling pressure. The momentum indicators such as the RSI also show a negative crossover, suggesting weakness.
We believe that ahead of Interim Budget, all market participants are remaining cautious on the Indices. Having said that, on stock specifics, some large-cap stocks such as Asian Paints, Axis Bank, HDFC and Titan are doing really well at the current juncture, which might help the Nifty to sustain the support levels.
Technically, the Nifty has good support at the 10670 mark. As long as it sustains above the mentioned levels, we maintain our cautious view. Any move below the same may drag the Nifty towards the 10570 to 10540 range. On the other hand, 10900 may act as a strong resistance mark and a breakout from the same may witness fresh buying, which might take the Nifty towards the 11100 to 11240 range.
Q) What are the charts of the Bank Nifty suggesting?
A) The daily chart indicates that the Bank Nifty is trading at higher tops and higher bottom patterns on price. But the RSI is showing a negative divergence, indicating a cautious view.
The Bank Nifty is facing strong resistance at the 27800-28000 mark. Whereas immediate support lies at 27300, any move below the same may drag the Bank Nifty towards the 27000 to 26800 range. The overall view is to remain cautious as long as it trading below the 27800 level.
Q) What are your top three trading strategies for the coming week with an investment horizon of 1 month?
A) Asian Paints - One can buy Asian Paints with target price of Rs 1470-1500 and a stoploss of Rs 1360.
The daily chart indicates the stock is trading in higher tops and higher bottom pattern indicates a positive view. Also the fact that the stock is well placed above all the important averages. Looking towards the trading pattern stock is likely to continue its rally towards Rs 1470/1500.
RECL - One can buy the stock with target Rs 140 and stoploss Rs 118
The daily chart indicates that stock has given a flag pattern with, volumes indicating a positive view. It’s well placed above all the important moving averages. Buy at the current market price (CMP) for a target of Rs 140.
Sequent Scientific - One can buy the stock with target Rs 84-88 and a stoploss at Rs 67.
The monthly line chart indicates that the stock has broken out of the double tops at the Rs 70 level. In the past two days, the stock has broken out of a downward sloping trend line at Rs 68 levels, with good volumes indicating a positive view. The RSI is also showing a positive view.
