The latest analysis and commentary by stock market guru Chandan Taparia of Motilal Oswal Securities on what is moving the markets today. Check out his top stock recommendations.
He spoke at length about Voltas, Mindtree, HDFC Bank and ITC.
“First trade is buy on Voltas. This stock has been making higher highs, higher lows. In the last series, it has seen rollover of 86-87 percent with the gains of around 5-6 percent. We have seen the built up of long positions in the last series. The stock has surpassed its falling supplying trendline, holding well above its 52-day exponential moving average (EMA) so recommending to board long at current rate or can buy on small dips near Rs 570, put a stop loss of Rs 557 and the stock has potential to move towards Rs 600 and the higher levels if someone is looking from a positional point of view. Second trade is buy on Mindtree. We have seen mix set of momentum in IT counter but Mindtree has been consolidating and given a range breakout on the last trading session with significant jump in the open interest (OI) and the volume activity. The stock has given a consolidation breakout on the daily and the weekly scale and the price set up indicates that upmove cannot be ruled out. So one can buy this with a stop loss of Rs 913 and expecting it to move towards Rs 985 as we have seen the rollover of more than 90 percent in the counter and longs are intact,” he said.
“One more trade – sell on HDFC Bank. This stock has been finding multiple hurdles near Rs 2,125-2,150 zone from last three series and every small bounce is being sold and because of that the stock may test the lower band of the territory. Looking at the price pattern, whenever it slips below 50-day exponential moving average, it corrects by 2-3 percent on a limited basis. So last trading session, it has managed to hold below 50 day EMA even after the market recovery, which indicates that some profit booking can be seen in the counter. So one can sell with a stop loss of Rs 2,114 and this stock has potential to go down and test the major support of Rs 2,025-2,022 level. One more strategy is on ITC. The stock has nature of being in positive to rangebound or the rangebound – recently it has taken support near Rs 272 zone and most of the time in last couple of series, the same support is being hold. Even the put writing has started to see in this rangebound counter. so because of some upmove, positive rangebound could be seen so here we are suggesting to go with bull call spread by buying one lot of 280 calls, selling one lot of 290 call so in the entire strategy one have to pay the premium of Rs 3.3 keep the spread stop loss of Rs 1.3 and keep the spread target of Rs 7.3, so risk reward ratio 1:2 and we are expecting ITC to move towards Rs 288-290 zone,” he added.
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