In the coming week of course these companies like TCS and Infosys will be coming out with their numbers and if you look at the top sector which lost this week was definitely the IT space. What is happening here, which are the stocks that look interesting and what would be your overall take when it comes to the IT sector?
If you look at the overall IT sector and if you look at what has happened in this sector is that this sector started leading the entire trend on the upside and since these past three days we can clearly see the sector had been under pressure. So overall, I think, it will consolidate. This is not the time where I think there will be a stellar results going to be announced by TCS or Infosys.
I think we will consolidate in a very broad range. If I have to still pick up something that I might end up pick up something from the midcap or the small cap space, something like eClrex which is a little out from the large cap space and is looking much more attractive than possibly a TCS. We can clearly see post the buyback announcement at TCS happened there was a huge move on the downside and then a recovery back. So I think it is time that TCS, Infosys both will consolidate.
You told us that IT is going to be seeing a bit of consolidation and a few of these FMCG names are making a comeback the likes of ITC, given the sector churn what are your top bets for the coming week or even a bit longer term?
In the coming week, I would possibly look at first of all the auto sector because after a long time we are seeing some kind of traction in the auto space and Mahindra & Mahindra looks like gaining a very good move on the upside. The stock has shown a very strong bullish candle formation, managed to outperform along with a huge volume so that is a plus. So Mahindra & Mahindra one can create long position here keeping a stop loss of Rs 827 for the target of possibly Rs 920 or higher. The next stock is from the midcap, small cap space is Sharda Cropchem. We can clearly see the stock has shown a huge run up and consolidated and now again it is getting ready for the third wave on the upside. So Sharda Cropchem can give exorbitant returns from here on. One can create long positions keeping a stop loss of 680 for the target of 755.
What is your sense regarding a couple of these counters which were making big moves this week, names like RBL Bank which was coming under pressure, Escorts was seeing quite a bit of downtick in this week and on the gaining side we had names like Metropolis and Tata Power which were surging? Anything that looks interesting or you would like to bet upon from these list of stocks?
If you are talking about RBL Bank I think there has been a very sharp correction in RBL Bank. It went from Rs 140 levels to around Rs 128. That is a sharp correction. So I will not bet on RBL Bank at this stage for sure. Escorts, again has shown and dip on the downside, I think it is quoting somewhere around Rs 1610 if I am not mistaken but Tata Power if you look at all of the stocks and compare that with Tata Power it is exactly the opposite. We have seen a very strong breakout on Tata Power. It managed to cross that Rs 260 mark just two or three days back sustaining around Rs 278 levels. I think this is an opportunity to enter into the stock after a month long consolidation.
So it has been moving in a triangle pattern since around six, seven months and given a very big breakout on the upside. So Tata Power I think should cross Rs 300 very soon and on the downside Rs 260 is going to be an important support. So Tata Power is my top pick out of these three.