Let us talk about the market levels. At present, the broader markets are showing signs of concerns and at the same time, the benchmarks are also showing a lot of volatility. What in your view is the strategy on Nifty as well as Bank Nifty?
CA Rudramurthy BV: Nifty definitely because of two issues, one tariff and two overall result performance has been on the weaker side. For these two major reasons, markets are definitely sulking downwards. Now the strong support area is around 24,350 to 24,400. If you remember, the gap up that we saw after the Indo-Pak war and all the issues that we saw on the market at that point of time, happened at around 24,380 and that holds a very strong support right now, keeping aside tariff and keeping aside the poor earnings overall as we have seen till now. The Bank Nifty is definitely outperforming Nifty overall and one has to be very sector specific and stock specific in this market.
For Nifty, 24,350 to 24,400 has been the strong support and for Bank Nifty it will be 55,500 to 55,600. Till it crosses 25,000, Nifty will do some time-wise consolidation. You have to pick the right sectors and stocks in this market if you have to be on the long side and if you are a short-term trader, you have to be very specific on your stock and very strict on your risk management.
If I have to talk about sectors, look at pharma, look at FMCG and also look at chemicals and insurance. These are a few sectors which are definitely showing strength. But if you look at sectors where there is a lot of weakness, it will be the top of my list and also look at the other sectors like even defence, capital market related themes. Even realty is looking weak. One has to be very sector specific in this market and on the long side, you have to be very, very choosy.
Can you share some stock specific ideas?
CA Rudramurthy BV: Nifty and Bank Nifty are weak, but it is too late now to short this market. We have to wait and watch what will happen next on the tariff front and I am looking at stocks and sectors where there is relative strength and I want to be a buyer there.
Indian Hotels is one such stock. Results have been good this quarter and there is strong support for the stock at around Rs 730. From current market price, the downside is very limited. Look at targets of Rs 800 initially on Indian Hotels. Keep a stop loss of Rs 730 for this long call. IndiGo is another stock which looks relatively strong to me and results have already come and relative strength can be seen in this stock. At the current market price and on dips to Rs 5,700, I will be a buyer. Positionally go long on IndiGo, have a stop loss of Rs 5,680 and look at targets of Rs 6,000.