ET Now: It is a little puzzling what happened on Friday. Not only did the 10000 peak managed to elude us the entire week, but with high volatility, Reliance alone could not really do anything. Blue chips like HDFC, L&T, ONGC just did not participate.
Kunal Bothra: We had a mixed bag in terms of largecap performance but I strongly believe that we are on course for not just hitting 10,000 but far higher levels. Clearly, if you consider the global correlation in terms of dollar index, look at the last six-seven months of dollar index performance, from 104 levels at start of 2017, the dollar index is now at 94 levels. It is almost at a seven-month low. Correlate that with Nifty as well. It has been moving in opposite directions at least in terms of price trends. That goes on to show that liquidity at least in terms of global markets is driving this run.
ITC was down 14% last week but Nifty almost recuperated the entire loss on that single day. So, we closed absolutely flat in terms of the Nifty performance and this market has had appetite to digest that. In the last five trading sessions, there were two short-term blips in terms of trends but both of those short-term corrections got absorbed quite well and as a result, Nifty was back again above the 9900 mark.
All in all, I believe that the stance is extremely bullish on the Nifty and it is a matter of time that it should not be just breaking 10,000 mark but you should be heading far higher than those levels.
ET Now: It is going to be tricky as to how to trade in Balaji Tele. The news is out in the open. The stock has been a great performer year to date, but what next?
Kunal Bothra: It is a classic case of a buy on rumours and sell on news. Friday’s volume suggested that. The volumes are almost at seven-year high for Balaji on Friday and at the open itself, the volume tick was almost at the higher side and post that, when the stock opened around the 200 mark, the stock dragged lower.
That goes on to show that there was a clear profit booking which happened into the stock. I believe it is possible that you might see one leg of correction into the stock, at least on short-term charts. It is possible that the stock may try and revisit that Rs 150-160 zone. Traders should probably try and wait for a certain amount of time. A 10-15% correction from current levels and then probably look at contrarian buying opportunities on Balaji at least.
ET Now: What would be on your trading radar come Monday morning?
Kunal Bothra: There are a couple of stocks which staged a breakout on Friday. First one is Manappuram Finance. On the short-term charts, the stock is looking extremely attractive. The stock closed at Rs 104-105 levels, almost at the high point of the day. After a decent intraday recovery, the stock should head towards Rs 112. So, short-term traders can look to buy at current levels and keep a stop loss at Rs 98.
The second would be a buy on Titan. After a big move which we had seen at the start of June for almost one, one-and-a-half odd months, the stock remained sideways.
On Friday, it managed to close once again at the monthly swing high. I believe that this consolidation could very well be over for Titan. It remains to be the second buy candidate. Traders could look at a target of Rs 565 and keep the stop loss at Rs 532.