The Indian equity market is likely to underperform over the coming weeks and the investors need to pick stocks carefully, says market expert Jai Bala of cashthechaos.com.
“You have to choose your stocks wisely. If it is going to be a leveraged stock, be careful but if it is a cash stock, you can be a little more liberal with your allocation,” he further mentioned.
According to Bala, Reliance Industries Ltd (RIL) could drop below Rs 1,380 and that would be the key. "It can drop to Rs 1,380 and Rs 1,350 but if it does drop to somewhere below Rs 1,304 or Rs 1,300 then that is going to tell us that this is very negative for a major long-term trend for the equity markets. HLL is another heavyweight; if it clocks Rs 2,135 before clocking Rs 2,300 that is going to be bearish for the major trend. Watch out for these stocks,” he added.
Bala likes technology stocks and expects some tailwind from the currency markets. "The strongest at this juncture – whether or not the rupee weakens – is NIIT Technologies. It is looking like it is going to hit record highs, it has got a strong weakly chart setup, very strong momentum in the short-term and it is crossing Rs 1,900. I won’t be surprised if it touches Rs 2,200-2,300 in the short-term. I would advise traders to place a stop below Rs 1,790 and expect Rs 2,200-2,300,” he noted.Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.