Market expert Kunal Bothra is bullish on SRF, Aster DM Healthcare and ICICI Lombard for the week ahead. Excerpts from an interview:
During the week gone by, we saw IT really putting on a power packed performance. Also, we saw a good contribution from banks. What caught your attention?
One of the highlights of the last week has been the recovery of both Nifty as well as the banking index. The previous week had seen a bit of a volatility which indicated that we would be in for some sort of a correction. But last week’s move which mostly came in the second half of the week categorically indicated that the trend for the Nifty is quite strong.
On the other hand, the F&O data also indicated that there was a comfortable roll over for the Nifty futures for the September series. This means that the market participants managed to carry forward long positions for this particular index for the September series as well.
The move specifically on Friday was also very intriguing because we saw a comeback of the broad base of the markets. The rally was not restricted to just one or two key sectors which had been the point of concern for the market since quite some time.
Stocks in the Nifty IT index along with few of the metal stocks did pretty well. Also, chemicals and healthcare stocks were exceptional. So there were so many sectors which managed to participate on and off and I think that was the highlights for the market for this week.
So I think it was a good week for the overall markets but the closing indicates that the midcaps and small caps could probably make a strong comeback going forward.
What are your top picks?
I have three buy calls for next week. The first one which I am suggesting is a buy on SRF. The stock has done absolutely wonders over the last 12 months. So even if we see the short term charts, it has confirmed a breakout of a bullish flag pattern on the daily timeframe. So I would suggest a buy with next possible targets of almost Rs 10,000 odd for SRF and a stop loss could be kept at Rs 9100 for a fresh trade.
The second one is a buy on ICICI Lombard and I had given this call even the previous week expecting that many insurance stocks could make a very strong comeback. ICICI Lombard ended the week on a very-very strong footing, confirming a breakout of swing resistances and a breakout of crucial moving averages as well. So I would expect a follow through upmove for ICICI Lombard. Rs 1640 could be kept as an immediate target with a stop loss at Rs 1520.
My third pick is from the midcap category. It is a buy on Aster DM Healthcare. The stock is making an inverted head and shoulder pattern on the long term charts and a bullish flag pattern on the daily time frame charts. So considering these aspects I would expect a strong upmove for the stock to continue. Traders could buy with the target of Rs 225 on a positional basis and the stop loss can be kept at Rs 184.