Nifty & Bank Nifty correcting Malkan's 2 picks

Meghana Malkan, malkansview.com, says the first pick that I will be looking at is Maruti. I like the way the pattern seems to be building up in Maruti. 11,300 seems to be a good stop for me as of now technically and I would look at a target of 12,500, so that is one pick. Second, the realty sector looks good to me. DLF seems to be a good pick from realty, Right now it seems to be at an all-time high. If I buy with a stop of 800 to 810, I would easily look at a target of Rs 900 plus if I build on the same trade advice.



We are seeing markets being at a one-month low. How do we go about the markets hereon?

Meghana Malkan: Broadly, I feel both the major indices, Nifty and Bank Nifty, are in a correction zone right now. The major reason being the multiple divergences on the oscillators. Volumes do not seem to be matching going along the price range. I believe there is some kind of disparity in the price volume as well. Nifty can find good support around 21,700. One could choose their strategy stock-specific or sector-specific but broader markets look to be a little in the correction zone.

When it comes to specific indices, Nifty IT has been seeing pressure because of stock-specific action in TCS. But Nifty FMCG is one index that has been continuously on a declining trend. Do you expect a turnaround going forward, given that on the fundamental side, analysts are expecting demand to bounce back in the second half of this calendar year?

Meghana Malkan: It could, but technically if you see, there are no bottoming or consolidation patterns on the chart. In fact, it is a little on the bearish side. For instance, if I pull out the weekly and the monthly charts of the FMCG sector, I see bearish candle patterns and I do see them building up with volume. So, unless and until I see a consolidation happening at the bottom, I would not be convinced of a tally with the fundamental factors. I would wait and watch before taking a decision on that.

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PSU stocks have given the highest return for investors in the first 11 months of FY24. But since the start of March, we have been continuously seeing a decline. In fact, it is one of the top losers in the month of March. How do you look at the PSU basket and any stock specific that looks attractive on the technical side currently in the PSU space?

Meghana Malkan: PSU basket, yes, it does look weak to me. State Bank and ICICI Bank seem to be holding on and they do look good to me right now. But overall, on the broad basket, I would not place my bet on the longer side as far as the basket is concerned. Stock specific, yes, if I get a short-term to medium-term investment opportunity in these stocks, I would. But overall, when you see the top-down approach in the market where if the sector is not supporting the stock, I would rather stay out and invest in realty stocks. Realty stocks look good right now.

Stock specific, Exide Industries is seeing a lot of downward pressure in trade. There has been a downgrade also coming in from one of the broking firms. How is that stock looking like on charts?

Meghana Malkan: On charts, if I pull out medium-term or weekly charts of Exide, momentum-wise there is a lot of weakness. In broader monthly charts, it seems to be in a consolidation mode. Until and unless I see breaking a low of, around 275 to 280, I would say it is broadly in the consolidation zone. Only a strong move about this range would convince me that it is okay to go long in that stock. On any move around that range, the stock is in the consolidation zone.

FMCG today is marred in trade. We are seeing HUL hit a 52-week low as well. What is the view in terms of the overall FMCG pack? How do you think that going to play out and also what is the view on IndiGo in the aviation space as well?

Meghana Malkan: So, overall, the FMCG space looks weak to me. I do not see much movement coming in any of the specific stocks. As the sector does not support, I would not bet more on the stock as well. If you talk about aviation, specifically about IndiGo, the weekly charts show stronger momentum.

A bullish candle pattern seems to be supported with good volumes as well. Last week, we saw good momentum and good action along with good volume in that stock as well. I would definitely go long in that stock. However, if you see the monthly chart, I would need some convincing to go long only if it closes above 3300 on a monthly basis. In the March close, any close above 3300 would give more confirmation of my bullish bias.

Any top picks in such a market that you would be looking at? Would it be coming more from the largecap or midcap side?

Meghana Malkan: The first pick that I will be looking at is Maruti. I like the way the pattern seems to be building up in Maruti. 11,300 seems to be a good stop for me as of now technically and I would look at a target of 12,500, so that is one pick. Second, the realty sector looks good to me. DLF seems to be a good pick from realty, Right now it seems to be at an all-time high. If I buy with a stop of 800 to 810, I would easily look at a target of Rs 900 plus if I build on the same trade advice.

Harry Byrne

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