CA Rudramurthy BV on crucial Nifty levels to watch; 2 stocks to buy

Economic Times

6 days ago

CA Rudramurthy BV, MD, Vachana Investments, says the crucial level to watch in Nifty is 24,500 which is a very strong support and on the higher side, 25,200 is acting as resistance. Tata Motors looks very strong. The stock has given a clear breakout above 700 zone and is showing patterns of accumulation. Rudramurthy said he would be buying Tata Motors stock available in Futures, look at initial target of Rs 780- 800 and keep a stop loss of Rs 700 on closing basis. RBL Bank is another stock which looks very strong at Rs 180-190, a lot of strong hands have accumulated the stock. Rs 250 will be my initial target, stock available in Futures. One can go long and have a stop loss of Rs 200 for RBL Bank. So, he has a buy on Tata Motor and on RBL Bank.
I remember your super bullish stance on the benchmark indices in the month gone by. But before we start the new series, give us some sense of how the data is shaping up and what is your outlook.
CA Rudramurthy BV: My very bullish stance worked out. You saw a thousand point move in Nifty in no time. I am now being very cautious for a very short time. Let me tell you why. If you see the market has repeatedly tested, in fact five times, it has tested the 25,100 to 25,200 level on Nifty Future and for some time it is hard now for markets to break that level. So, having seen this big 1,200 points recovery, we were at levels closer to the 23,900 when we had the geopolitical tension, India-Pakistan – the escalations and de-escalations which were happening around and I was putting that bold call that yes, market will go to 25,000 + and we saw markets going there.
Now, for me the crucial level to watch in Nifty is 24,500 which is a very strong support and on the higher side, 25,200 is acting as resistance. So, give that 100 points plus or minus, and around 25,400, 25,500, you have a strong support and resistance is at 25,100, 25,200. I feel the market will now see some amount of time-wise consolidation and for a medium to longer time frame, more the time we spend in this range, it is good and healthy for a longer time frame. Similarly, if you see Bank Nifty, strong support is at 54,700 and multiple times we have seen resistance at 56,000. For me, Bank Nifty is in that range of 54,700-56,000 and Nifty is in that range of 24,400 to 25,200. Markets will be more sector specific and stock specific and it will spend some time in this range which is good for a longer time frame.
You were just mentioning that the market is soon going to be a sector specific as well as stock specific market. So, talking about sectors, do you see any sectoral churns at play at this point in time? Which sectors do you feel are showing momentum on the charts?
CA Rudramurthy BV: Earlier I was very bullish on private banks and you had a lot of valuation comfort and these stocks did well even during that October to March period last year when markets were not doing well whether it was HDFC Bank, ICICI Bank and you have already seen the move and I was very bullish, super bullish, on private bank.
Even now, if you have a larger time frame of at least one year plus, I will still say private banks will be my top pick. Financials will do good. Look at HDFC Bank, look at ICICI Bank, even at current market price, there is still value left. However, if I have to look at even margin of safety and at current market price, if I have to buy some stocks, yes, I will look at technology, IT as a sector, look at charts of Wipro, look at even stocks like Tech Mahindra, Coforge, you have to be very stock specific and selective even within the IT basket. So, for me, it is a choice. Look at Wipro, look at Tech Mahindra, look at Coforge, they all look very good and at current market price the margin of safety is very good to enter at current market price and hold on and you will make good money in it and specifically in stocks like Tech Mahindra, Wipro, and Coforge which I like a lot. For me, even PSU as a theme has more comfort at current market price. So, if you have to select from PSUs, for me defence is a must area where one has to have a portfolio there and in your portfolio you cannot miss stocks like HAL, you cannot miss stocks like BEL, so defence for me is another area from PSU basket which will do very good. You can even pick stocks from railway, shipping whether it is Cochin Shipyard or Mazagon Dock or even from rail if you have to pick stocks you have RVNL, you have stocks like IRCTC also so which can do good. Titagarh Wagon is another great stock. So, you have to be in PSUs right now. Whether you want to pick from defence stocks like HAL, BEL, shipping, or railway, these will do good. And even for me power as a theme, as a sector can do good. And even there if you want to pick up stocks from PSU, matter of choice, you can even look at charts of PFC and REC looking very-very attractive at current market price. These power finance companies can do good and even if you see charts of NTPC, charts of Tata Power, Power Grid they all look very-very good at current market price. So, I will be very sector specific and stock specific at current market price and for me even stock like IndiGo, you should not miss. After this promoter stake sale, IndiGo is available to you today closer to that 5,200, 5,300 level, mouthwatering price to buy IndiGo at current market price. Similarly, for me, Paytm is another stock specific call at current market price. Concor is another PSU which you can pick and have in your basket. So, a lot of ideas I am giving are both sector specific and stock specific. They all look very good to me.
But specifically, if you can highlight two counters which are the tradable ideas right now with the stop losses and the target price as well.
CA Rudramurthy BV: For me, Tata Motors looks very strong. The stock has given a clear breakout above 700 zone and it is showing patterns of accumulation. I will be buying Tata Motors stock available in future, look at initial target of 780 to 800 and keep a stop loss of 700 on closing basis. RBL Bank is another stock which looks very strong, 180, 190, a lot of strong hands have accumulated the stock. 250 will be my initial target, stock available in futures, one can definitely go long and have a stop loss of 200 for RBL Bank. So, a buy on Tata Motor and on RBL Bank.