June expiry may keep markets volatile this week; book profit on rallies: GEPL Capital
Given the small premium of 46-50, that the 10,850-CE governs, it would be worthwhile to buy it with possible targets around Rs 150-200 ahead of expiry, Pushkaraj Sham Kanitkar, AVP - Technical Research at GEPL Capital, said in an interview with Moneycontrol’s Kshitij Anand.
Given the small premium of 46-50, that the 10,850-CE governs, it would be worthwhile to buy it with possible targets around Rs 150-200 ahead of expiry, Pushkaraj Sham Kanitkar, AVP - Technical Research at GEPL Capital, said in an interview with Moneycontrol’s Kshitij Anand.
Q) The Nifty50 on weekly basis closed flat but with a negative bias. What does weekly, and monthly chart tell about the technical picture?
A) The last hour has seen market claw back the lost ground, in fact by closing up by around 5 points for the week. Nonetheless, the picture still remains pretty fluid.
While in the last week, the Nifty50 candle showed upper shadow (Corrected from 10,893 to 10,817), the current week is showing a lower shadow (bounced from 10,701 to 10,821).
These shadows in a way define the immediate barriers placed between levels of 10,701-10,893. The monthly candle too is currently seen forming an “Inside Month”, which would mean that one needs to wait for the market to move past the extremities for a clear direction.
Q) Next week is June expiry -- any particular strategy which investors can deploy ahead of the event?
A) The market has remained in a sideways tranche for almost 3-4 weeks now, which indicates to a compression of the spring. The fact that Nifty is seeing support at lower levels and the strength amongst the heavyweights brings us to believe that market might make an attempt to take on lifetime highs over the next week or 10 days.
Given the small premium of Rs 46-50, that the 10,850-CE governs, it would be worthwhile to buy it with possible targets around Rs 150-200 (Around 11,000 on the Nifty).
Q) Plenty of stocks hit fresh 52-week lows this week instead of 52-week high. We have seen that happening throughout June. The absence of buying in broader markets is likely to cap upside for markets, and what should investors do with stocks hitting lows -- hold or exit?
A) The major momentum that the Nifty is deriving is coming out of strength in certain heavyweights. While earlier it was banks, and now the momentum has shifted to IT pack and Reliance Industries which have come to the rescue.
We had categorically stated in our earlier outlook as well, that the midcap-smallcap are a strict no-no, given the intrinsic weakness in individual stocks and in indices as a whole.
We still stand by our hypothesis that the broader indices may further correct by around 5-7 percent. Hence, one could be looking at opportunities for exiting these scrips on any fruitful rise.
Q) What is your call on smallcap and midcap stocks? Should investors stay away or just book profits on rallies?
A) Once again we would go by our hypothesis and recommend to book profit on rallies.
Q) Top 3-5 positional calls which could give handsome returns to investors in next 1 month?
A) As mentioned earlier we would prefer going with the frontliners and our picks are:
Cipla: Buy| CMP: Rs 615| Target: Rs 660| Stop loss: Rs 595| Return 7%
Kotak Mahindra Bank: Buy| CMP: Rs 1,320| Target: Rs 1,420| Stop loss: Rs 1,290| Return 8%
Asian Paints: Buy| CMP: Rs 1,268| Target: Rs 1,330| Stop loss: Rs 1,221| Return 6%
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