“Currently Nifty is trading at 24,290, my stop loss for this would be 24,700 and I am expecting downside levels of 23,500 to 23,000,” says Aditya Arora, Adlytick.
Second straight days of gain that we are seeing, has Nifty bottomed out and any hurdles or resistance that you are seeing at upper levels now?
Aditya Arora: Look, it has been a fantastic rise in last two days, but I believe it is an opportunity to lighten up the portfolio because the texture of market is still lower high, lower low kind of a pattern, which is bearish in the medium term. So, I would not be surprised if we see profit booking in zones of 24,250 to 24,600. This is an important resistance for the bulls. So, one must expect a rally only if market sustains above 25,000 for a few days. Otherwise, I expect this rally to fizzle out. We have already gapped up. We have a gap today. We have opened with a gap. I expect this gap to fill up not immediately, but in a few days. And even international markets are pretty overheated, so that can create the pressure and in Indian markets, IT sector is a little overheated so that can again put the pressure. Currently Nifty is trading at 24,290, my stop loss for this would be 24,700 and I am expecting downside levels of 23,500 to 23,000.
PSUs have been leading this gain that we are seeing in the market. How is the PSU Bank Index and the PSE Index looking like on charts?
Aditya Arora: PSU Bank Index strongly bounced back. But again, it is trading below its 200-day moving average, which is placed at 7,000 and Nifty PSU Bank Index is trading right now at 6785. So, I feel 1% to 2% of upside is the room on the upside. But on downside, I expect, again, lower-high, lower-low pattern forming over there. So, I am a little neutral to bearish even in this Nifty PSU Bank basket. So, it is an opportunity for everyone to actually sell at higher levels and they will get an opportunity to accumulate at lower levels.
Any stock calls at this price point, the stocks that you are tracking?
Aditya Arora: Although, I do not have a lot of buy recommendation right now and given the downward trend in the market, I expect not an absolute outperformance, but relative outperformance can be seen in SRF. Chemical space is doing well. So, this is one of the largecaps in that space. This could be bought at 2,228, stop loss must be placed at 2,120 and target is 2,320. Again, highlighting that, given the downtrend, I am not expecting runaway rally but I maintain neutral to bullish stance in this counter.