Buy the dip in case of a big gap-down opening on Monday; 2 stocks to pick: CA Rudramurthy BV

Time of India

25-04-2025

CA Rudramurthy BV of Vachana Investments advises investors to buy on dips, particularly in private and PSU banks, insurance, and NBFCs. He highlights ICICI Bank and Paytm as promising stocks, with Nifty support at 23,400-23,500 and bank levels around 52,800-53,000 as buying opportunities. Any rally in IT and metals should be used to shift into these sectors.
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BV, MD,, says the market is showing strong potential and it is not a market to short but rather one should be buying on dips, especially if there's a gap down on Monday. Key sectors to focus on include private and PSU banks, insurance, and NBFCs. ICICI Bank and Paytm are highlighted as promising stocks. Nifty support is seen at 23,400-23,500. Bank levels around 52,800-53,000 present buying opportunities.Rudramurthy further says any rally in metals and IT should be used to shift into private and PSU banks, or even NBFC, and insurance.: First of all, we have to understand the backdrop of why markets are falling. It is because of the jitters from the Pahalgam event. However, one has to keep in mind that the rally has been very swift. In fact, in the last eight trading sessions except for today, we have seen a rise of 2,500 points in Nifty.On an average, it is a 300-point rise on a daily basis. When it comes to Bank Nifty, it has gone much more ahead, it is a 6,500 points rally in the last eight trading sessions before today. So, some amount of profit booking is definitely good, but one has to keep in mind that this is a market which you have to buy-on-dips and it is not a sell-on-rise market and we have already changed the structure of what we had seen earlier from October to March.Also, in this quarter's results – whatever has come till now – is far better than what it was in the previous or even for that matter, the quarter before that. So, I am very bullish on this market, but you have to buy this dip. If escalations happen and you get any big gap downs on Monday, that will be a fantastic buying opportunity and you have to be very sector and stock specific. So, for me, sectors like private banks, even PSU banks, insurance and NBFC stocks, OMCs are the places where you need to be and definitely, I will use any rally in IT and metals as an exit opportunity. But definitely, this is a buy-on dips market for me.Nifty at 23,400-23,500 is a very strong support. So, even if the escalation happens during this weekend and we get any gap down, use that opportunity to buy and wait for this news to settle down and Nifty levels closer to the 23,400 is a great opportunity to buy. And similar levels on banks will be 52,800; around 52,800-53,000 level, there will be a very good opportunity to buy.Stock specific, I like Paytm. Look at the structure of this stock. Paytm from levels of Rs 800 did a non-stop move towards Rs 900; open interest build up and even delivery volumes going on the higher side is very supportive for price. So, in this correction and on dips to levels closer to 830, 840 I will be a buyer in Paytm, looking at targets of 1,000 to come on Paytm for a positional buy and one can have a stop loss of 830 for this long call.Another private bank which has come out with fabulous results and also where on chart, there is a very strong support at levels closer to 1350-1370 is ICICI Bank. Private banks will do good. In fact, it is a choice between HDFC Bank, Kotak Bank and ICICI Bank. But I have picked up ICICI Bank at current market price and on dips to Rs 1380-1370, will buy onto ICICI Bank, look at targets of Rs 1500 to come on ICICI Bank. So, a bullish stance on the market. If you get a gap down on Monday, use it to buy these great sectors and stocks which I have mentioned.: Let me be very clear, this is not a market to short but definitely is a market to buy on dips and not at current market price, if you are a very short-term trader. It's good there has already been a dip today, keeping in mind the escalation which might happen at our border, but then one has to understand that the market texture has completely changed and this might be the reason why we are seeing the fall in market because of the escalating tensions. But the overall market structure has changed in the last two weeks.In the end of March, we have already seen a selloff that happened from October to March and now this market has turned to buy on dip. So, what traders can do for short-term is reduce your leverage, reduce long exposure, keep cash, have gunpowder with you so that you can buy stocks when you get that gap down. Use that gap down as an opportunity to buy and now is not a time to short for sure. You have to be very sector specific and stock specific. Book profits in IT in general because the entire rally in IT and metals which you have seen last week is more of a short covering rally and a lot of shorts which were there in IT have already got covered.I have seen the same thing in metals. So, I will use this rally which came last week in metals and IT to shift into private banks, public sector banks, or even for that matter NBFC, and insurance. So, these are all the sectors which are doing very well. In fact, even power for that matter, is a choice whether Tata Power, NTPC or even power finance companies like PFC, REC they are all available at mouthwatering price. So, power as a sector can do good for me.In insurance, look at SBI Life, fabulous results and stock is doing great; look at even HDFC Life. Private banks, look at ICICI, look at HDFC, Kotak Bank and from public sector banks look at SBI and look at Bank of Baroda and even for that matter OMCs look at BPCL, HPCL, these are all sectors which will definitely do good and use the dip in market to buy into these sectors if you get and this is not a market to short.