INSUBCONTINENT EXCLUSIVE:
Strides Shasun, Aditya Birla Fashion and Kotak Bank are the three stocks to bet on next week, says Kunal Bothra, kunalbothra.co.in
Open interest data which transpired last week still suggests that there has been more long built up on the Bank Nifty futures, says Bothra
Excerpts from an interview with ETNOW.Metals are going up, PSU banks are going up, FMCG as a sector is not doing that well
Are these the classical signs of a risk-on trade?Kunal Bothra: Yes, these are classical signs of risk-on trade and add to that the
consistent move in those largecap names which have been doing extremely well
The tendency of the short-term trader to try and latch on to stocks which are running on high beta and probably playing for a contrarian
trade, is not playing this time around
It is more of the continuation we have seen in the last few months of this market rally in stocks like ICICI Bank, Axis Bank to a larger
extent, Kotak Bank and HDFC Bank as well
These stocks have been doing extremely well
All the other sectors have been playing a helping hand but not many of them have recovered or converted their short term rallies into trends
That is what separates the men from the boys in this rally and that is going to be the likely texture for the markets going forward as well
Just one important observation, the open interest data which transpired last week still suggests that there has been more long built up on
the Bank Nifty futures and that is why I am highlighting many of these private sector banks because if they continue to move up higher from
where they left off on Friday, then there is a higher chance of Bank Nifty leading the breakout in Nifty for next week.
What do you make of
what is happening in the telecom pack now? Bharti at the end of the week was among the top gainers in Nifty?Absolutely and it is one of the
best moves for the Bharti Airtel stock in the last so many weeks and months
It used to have more of a staggered continuation up move but what transpired on Friday was nothing more than exceptional because the stock
It tested the mark of Rs 360 which was more or less a closing base support for Bharti Airtel.
I believe that the remarkable turnaround in
the first half of the session itself and stock closing at the highest point of the day indicates that this stock is ready to move up higher
The volumes moved up significantly higher for Bharti Airtel and so that is an added positive
The other point is that it is now closer to the psychological mark of Rs 400 as well, which has been acting as a hurdle for the stock price
When a largecap stock like Bharti Airtel consolidates at the upper end of the resistances and goes through a time-based correction or more
volatility, in between it is a sign that the stock is reading for a big breakout on the upside
A continuation move above Rs 400 for Bharti Airtel would be taken as a breakout move for the stock and post that, I would expect price
What you have seen in the last one year, even a target of Rs 440-460 will not be ruled out provided the stock sustains that breakout of Rs
400.
Another interesting space has been what is happening with the metal pack
Some of the steel companies are moving
What is your sense on largecap metal names?It has been topsy-turvy for these stocks when you look at it on a collective fashion because on
the one hand, midcap stocks like Jindal Steel have done exceptionally well
In the last month or one-and-a-half month, it has rallied 50-55% but the other stocks have not failed to show signs of momentum
Hindalco was one of the stocks which also showed potential but post results, the stock has fallen back below that Rs 200 mark which was a
strong psychological support
Vedanta on the other hand has been a laggard
The stock had shown signs of potential earlier but it keeps on failing time and again ad makes new swing lows
Those are the two stocks which I particularly believe would continue to be a drag on the overall metal index
Tata Steel on the other hand keeps giving that periodic bouts of rally
In terms of a strategy, if you can get Tata Steel may be 4-5% from its recent swing highs, that will be a good entry point for playing the
stock with a risk reward of 1:2
It has to be more stock specific and not a holistic view on the metal stocks.
Any picks for our viewers?Absolutely
There are three buy calls and all three of them are varied in terms of strategy
The first is a buy on Strides Shasun
That stock looks extremely strong on the short term charts
The indicators have gotten into an extremely oversold territory
So, the chance of a strong bounce over the next one week could not be ruled out
I would suggest a buy with a target of Rs 395 and stop loss at Rs 364
Second is Aditya Birla Fashion
It is more of a breakout candidate
The stock was consolidating since last so many weeks, trading above the 200-day moving average
The volumes and the indicators have now pepped up higher for Aditya Birla Fashion
That could lead to a strong breakout over the next one week
That is also a buy with Rs 230 approximately as a positional target and a stop loss of Rs 200
The third would be from the largecap space
It is a buy on Kotak Bank
Many of these banking stocks, even Kotak Bank, I believe now be heading towards consolidation breakout more of a continuation breakout on
the daily and the hourly charts so buy with a target of Rs 1680 and stop loss at Rs 1580.