Opt For Contra Long Trades As Nifty Recoups To Support Levels, Says Analyst
Analyst suggests contra long trade as Nifty Pharma poised for breakout.
This is the best time to take a contra-long trade, as equity markets have recouped to important support levels after having corrected in the past few trading sessions.
That's according to Ruchit Jain, CMT lead research analyst at 5Paisa Ltd. “Markets have seen a correction in the last few trading sessions and are back to their support levels of 22,600–700,” he told NDTV Profit.
Jain expects "good momentum" in the pharma sector in the next 2-3 trading sessions since Nifty Pharma is on the verge of breakout. His recommendations include Biocon Ltd., among other firms.
Sudip Bandyopadhyay, group chairman at Inditrade Capital, stressed the need to distinguish between performers and non-performers in the public sector undertaking basket. “I'm sure this will happen soon.”
Bandyopadhyay said it's important for the companies to perform well, as accumulating orders doesn’t ensure success. “Unless this happens, some PSUs will start falling behind.”
Among his recommendations are the state-run firms Mazagon Dock Shipbuilders Ltd. and Cochin Shipyard Ltd., which have not only received a large number of orders but are also executing them efficiently.
He was also bullish on power producers such as NTPC Ltd., REC Ltd. and Power Finance Corp.
The benchmark equity indices recorded their biggest fall in 14 sessions on Wednesday as they continued to decline for the fourth consecutive session.
The NSE Nifty 50 closed 183.45 points, or 0.8%, lower at 22,704.70, while the S&P BSE Sensex ended 667.55 points, or 0.89%, down at 74,502.90.
'Bears Showed Their Presence'
"The bears showed their presence, with a steep fall in the opening trade itself," Aditya Gaggar, director of Progressive Share Brokers Pvt., said. "In the mid-session, a minor recovery was seen but that fizzled out as another round of selling took place, which dragged the index below 22,700."
"On the daily chart, the Nifty has breached its immediate support of 22,780, but considering the monthly expiry day tomorrow, we feel that a short-covering move will bring the index above the triangle pattern breakout point," he said.
Watch the full conversation here:
The views and opinions expressed by the investment advisers on NDTV Profit are of their own and not of NDTV Profit. NDTV Profit advises users to consult with their own financial or investment adviser before taking any investment decision.
