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What is your position in the market right now – bullish or bearish? Is today’s upmove a pre-budget rally under way?
CA Rudramurthy BV: First of all, a view on the overall market. Today the Nifty has crossed that level of 21,600 to 21,650 zone which is a resistance zone and now if we can close about 21,650 for short term, that will tell me that this market is still a buy-on-dip market. However, for me, one-day close is just not enough. I want to see whether even tomorrow we can hold those levels above 21,650 which is a very crucial resistance. If we take off that and even the 20-day moving average is placed at around 21,630 and if Nifty can close above this 21,650, then I say okay for short-term, shorting is not a good idea.
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Similarly on, Bank Nifty the levels are 46,500. I want to see those levels of around 45,600 which is now taken off on an intraday basis but I want to see whether we can close above 45,600 even tomorrow. So, 45,600 is a very crucial level on Bank Nifty spot and for Nifty it is 21,650, I will wait for a close tomorrow above these levels to say that yes this market will have that pre-budget rally and we can further move up or else just better be very stock specific and also be on sidelines, waiting for great opportunities to buy.
How are you approaching trading right now? What are your trading ideas?
CA Rudramurthy BV: I am being very, very stock specific in some midcap ideas where valuation comfort is still there. One such stock is Thomas Cook. So, for me, Thomas Cook has made this rounding bottom formation which is very positive on technicals and having made a clear breakout above levels of around Rs 175, on a closing basis it is sustaining above these levels, for a very short term look at target of Rs 200. For me this is a stock which can move to the Rs 230-250 zone having a strict stop loss of Rs 170 a buy on Thomas Cook.
For me, MRPL also looks very strong. In fact, I was bullish on this stock from Rs 70-80, even at current price, it looks very strong. The stock has given a clear breakout above levels of around Rs 140 and it is now sustaining above those levels clearly. So, for me, it was just a choice between MRPL or Chennai Petro or even Supreme Petro. These stocks can do very well. For MRPL, initial target is Rs 210 with a stop loss at Rs 165.
What about Reliance and some of the power stocks like Tata Power? There are big moves coming in 4-5%, where do you see these names heading?
CA Rudramurthy BV: Reliance today should close above 2800 and it is very likely to do that, that is a clear breakout on Reliance and this stock has not performed for last one year and it has disappointed many people who were invested in it. But I feel now if it sustains above 2800, a move towards Rs 3,000 cannot be ruled out.
Tata Power is another excellent stock to be picked up at any level, however, for me Tata Power is a good buy on any dips to levels closer to Rs 365 zone or even at current market price, one can enter Tata Power and buy on dips to Rs 365, looking at targets of around Rs 430-450 to come and keep a strict stop loss for this at around Rs 350.
Apart from Reliance, we are also looking at some Adani Group stocks making big moves. In fact, a big global brokerage made a very big claim of almost 50% target price hike on Adani Enterprises but others are also buzzing. Anything which you like in Adani Group stocks?
CA Rudramurthy BV: Someone who understands valuation and someone who has seen already the big fall of 50-60% kind of a move what we saw in Adani earlier, no doubt from those levels there was fair value and from those levels the stock has already bounced back. Adani Enterprises, Adani Ports and the group stocks are closer to their all-time high levels
However, I am not so comfortable buying now at current levels having already seen big moves in these stocks. However if one wants to buy for trading purposes, one can consider Adani Enterprises or Adani Port. In Adani Enterprises, one can have a strict stop loss at around Rs 2,850 and then go long.Similarly, on Adani Port, the levels are now closer to Rs 1,100 zone and one can have a strict stop loss of around Rs 1,100 and then again go long or right the long positions if you have but for investment at these levels, definitely a no-no.
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