Chartist Talks: Amol Athawale of Kotak bullish on these 3 stocks, but bearish on Nifty 50
Amol Athawale believes to stick with good quality frontline IT companies would be the ideal strategy for the positional traders.
Sunil Shankar Matkar
May 08, 2024 / 08:25 AM IST
Amol Athawale is the Vice President of technical research at Kotak Securities
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“The short-term trading set up indicating as long as the market is trading below 20-day SMA or 22,450 the weak sentiment is likely to continue in the Nifty 50,” Amol Athawale, the Vice President of technical research at Kotak Securities said in an interview to Moneycontrol.
Technically, he believes Finolex Industries is in to the strong uptrend wave and further upside may also continue which could lift the stock up to Rs 315-320.
Amol, with 15 years of experience in technical research, also bullish on Infosys, and SBI Life Insurance Company.
Is it the right time to have FMCG stocks to portfolio?
In this week so far, the FMCG index rallied over 2.5 percent. After a long correction eventually, the FMCG index took the support near 200-day SMA (simple moving average) and reversed. Post reversal now it is comfortably trading above 50 and 20-day SMA which is largely positive.
The short term and medium term texture of the FMCG index indicating the overall FMCG basket is likely to continue the positive momentum in the near future.
Do you think the Nifty can take support at lower end of upward rising channel (comes around 22,150 which also coincides with 61.8 percent Fibonacci retracement) or do you see the index falling further in coming days?
Currently, the market is consistently facing selling pressure at higher levels. A Double Top formation on daily and weekly charts suggesting upward trend has slowed down. The short-term trading set up indicating as long as the market is trading below 20-day SMA or 22,450 the weak sentiment is likely to continue.
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On the flip side, the next support level for the traders could be Rs 22,200-22,150. Below which the selling pressure is likely to accelerate. Below 22,150, the chances of hitting 22,000 would turn bright.
What is your F&O trading strategy for Nifty 50 given the weekly expiry on Thursday?
For weekly option traders now, 50-day SMA or 22,300 would act as a sacrosanct level. Above which we could expect a one technical bounce back till 22,400-22,425. However, below 50-day SMA the texture could change.
Below the same, one can look for the Put option. On the down side, 22,200-22,150 would be the key supports zones for the traders.
Have you started taking exposure to technology stocks, which also played a defensive role in the falling market?
Technically, after a long correction the Nifty IT index trading near 200-day SMA. We are of the view that, if the market has formed reversal formation then IT stocks are likely to outperform in the near future.
However, considering the overall scenario we believe to stick with good quality frontline IT companies would be the ideal strategy for the positional traders.
Finolex Industries seems to have given a bullish Flag breakout. Do you expect the stock to cross Rs 300 soon or more?
On last Tuesday, the stock not only registered a fresh all-time high of Rs 286.5 but it succeeded to close above Rs 280-resistance mark, which is largely positive. Technically, the stock is in to the strong uptrend wave and for the trend, following traders now, Rs 265 or 20-day SMA level would be the important reference point. Above Rs 265, the stock could move up till Rs 300. Further upside may also continue which could lift the stock up to Rs 315-320.
Your top two bets, where charts are looking quite strong, for next week?
Infosys: Buy | Stop-Loss: Rs 1,400 | Target: Rs 1,500/1,525
After a long correction, the stock took the support near Rs 1,375 and reversed. Post reversal the stock is comfortably trading above Rs 1,400 level, which is largely positive. We are of the view that, as long as the stock is trading above Rs 1,400 the pullback formation is likely to continue in the near future. On the higher side, the stock could move up to Rs 1,500-1,525.
SBI Life Insurance Company: Buy | Stop-Loss: Rs 1,415 | Target: Rs 1,525/1,550
Post short-term correction, the stock is witnessing rangebound activity near 200-day SMA. Currently the stock is witnessing positive consolidation and the short-term formation indicating strong possibility of fresh uptrend rally from the current levels.
We are of the view that, unless it trading below Rs 1,415, positional traders retain an optimistic stance and look for a target Rs 1,525-1,550. The fresh buying can be considered now and on dips, if any between Rs 1,450 and 1,425 levels with a stop-loss below Rs 1,415.
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