Mehul Kothari AVP – Technical Research, Anand Rathi Shares & Stock Brokers said there could be an opportunity to make a profit from the 17300 – 17500 zone.
In an interview with Zeebiz’s Kshitij Anand, Kothari emphasizes that very short-term traders can book longs and re-enter once we see a meaningful dip, while long-term investors can hold their positions as the broader structure still remains extremely strong. Edited excerpts:
Q) Bulls took charge of the Indian markets this week. Benchmark indices rose more than 4% in the week with a short break. What sparked the price action?
A) Although shortened but it was a phenomenal week for the bulls on the D-Street. Benchmark indices showed tremendous strength, recovering about 4 percent from last week’s close.
The Nifty50 index gained 17,300 points during the last session of the week amid easing concerns between Russia and Ukraine.
Another reason could be the US Fed meeting that has ended and dusted and the cooling in commodity prices, especially crude oil, also supported sentiment.
The index has recovered more than 1,600 points from its recent low of 15,671.
Q) The Nifty50 is back above 17000. What is the level you expect for the index and Nifty Bank in the coming week?
A) Technically, the Nifty50 index is now well above 16,800, which was the breakdown zone. In fact, it has now crossed the 17000 mark on Thursday to close the hole created on February 24, 2022 as a result of the war between Russia and Ukraine.
This indicates that the bottom of 15671 is very sturdy and may not be tested again for several months. On the plus side, however, Nifty got stuck right near 17330 which is the 61.8% retracement of the entire fall from 18300 to 15700.
In addition, we have Ichimoku flat line resistance near 17500 marks. So, if you go ahead, there could be an opportunity to make some profit from the 17300 – 17500 zone.
In that scenario, 17000 – 16800 could be the support zone from which buying could re-emerge.
As for NiftyBank, the index is up more than 5 percent in the week ending March 17. In the process, it has regained 36000 marks on a closing basis from the lows near 32000 marks.
So it looks like the 32000 bottom is strong and may not be retested anytime soon. Like the Nifty index, even the NIFTY BANK index stuck right at the 61.8% retracement level from the previous fall.
So for the week ahead, 36500 – 37500 could be the zone from where we can make some profit. The disadvantage is that 35000 – 34000 can be an attractive zone to bet fresh long.
V) On a sectoral basis, consumer and banking stocks predominated. What sparked the price action, but last week’s “metals” star took a beating? What sparked the price action?
A) Consumption and banking are weighty sectors from the FII perspective and when we saw FII being sold for risk reduction — these were the natural choices. They were greatly oversold and that could be one of the possible reasons for such a sharp recovery in them.
In metals, we’ve seen significant gains in this space, largely driven by material prices. Recently we have seen a sharp correction in many commodities; hence the reaction is seen in our metal space.
Q) While India celebrates the Holi festival – what your Holi picks are for investors for a period of 9-12 months.
A) Here is a list of long term stocks –
HUL: Buy on dips| LTP Rs 2102| Stop Loss: Rs 1900| Target: Rs 2400 | Upward 14%
Coming out of a defensive space, HUL hasn’t done much in recent months. Technically, it’s oversold on larger charts.
During the recent fall, it dropped to 1900, which is the placement of the 200-week moving average. The stock has retested this average after 10-12 years, indicating that now is a good time to grab the stock for investment.
Traders are advised to buy the stock in the range of 2100 – 2040 with a stop loss of 1900 on a closing basis ahead of the upside potential target of 2400 in the next 9 to 12 months.
ITC: Buy on dips| LTP Rs 245| Stop Loss: Rs 210 | Target: Rs 300 | Upward 22%
In our previous interview, we recommended buying ITC near 220 ahead of the 245 upward target. That 245 target was tested during Thursday’s trading session.
In the process, the stock has confirmed another breakout from the range above 240. We also have a triple bottom formation on the weekly chart, close to 200.
Since the counter is defensive in nature, we expect very less volatility in the stock. Therefore, traders are advised to buy the stock with dips in the range of 245 – 235 with a stop loss of 210 on a closing basis ahead of the upside potential target of 300 in the next 9 – 12 months.
Kotak Mahindra Bank: Buy on dips| LTP Rs 1819| Stop Loss: Rs 1650| Target: Rs 2100 | Upward 15%
Unlike other private banks such as ICICI Bank and Axis Bank, Kotak Bank has yet to make a significant recovery. Technically, it has created a double bottom formation near the 1650 mark.
It has strong demand near that zone. It looks like the stock still has a long way to go from its current level. Therefore, traders are advised to buy the stock in the range of 1820 – 1780 with a stop loss of 1650 on a closing basis before the upside potential target of 2100 in the next 9 – 12 months.
Q) The US Fed took the first step in raising interest rates, which market participants anticipated. But do you think further rate hikes could impact equity markets or anticipate the worst?
A) If the markets had to react to the Fed rate hike, it would be today. The markets took the decision with a grain of salt and probably also anticipated further gains.
In the event of a shake-off, the markets would need another trigger and not the rate hike.
Q) Bulls have taken control of D-Street – do you think this is the right level to invest or long-term investors can wait a while?
A) As mentioned above; as the index has risen about 1600 points from its low, there is an opportunity to see some gains in the coming sessions.
Very short term traders can therefore book longs and re-enter as soon as we see a significant dip. While investors can hold their positions as the broader structure still remains extremely strong.
(Disclaimer: The opinions/suggestions/advice expressed here in this article are those of investment experts only. Zee Business encourages its readers to consult their investment advisors before making any financial decision.)
This post HUL, ITC, Kotak Mahindra Bank Top Stocks For Next Holi; expects 14-22% return: Mehul Kothari of Anand Rathi was original published at “https://www.zeebiz.com/market-news/news-hul-itc-kotak-mahindra-bank-top-stocks-for-next-holi-expect-14-22-return-mehul-kothari-of-anand-rathi-181144”