stock picks: Mandar Jamsandekar’s 2 stock picks for this week
Although benchmarks and broader markets saw declines, Bank Nifty, especially PSU bank names, has weathered the trend. Do you think this sort of sector rotation will continue from now on?
Yes, I think it will continue and the reason behind it is the distribution that is happening. So when we saw equity rallies like auto, power, and steel, banks weren’t on that rally. Right now, an index balancing is underway as banks hang on to all-time highs or 52-week highs and we are seeing profit-taking in other sectors.
So this will continue but not for very long as the Nifty is now trading around the support levels. But yes, all of the benefits are going to witness the realization of profits and this is especially true for any stocks that have experienced multiple recoveries in the past six months to a year. These stocks will therefore record profits at higher levels while the banks can play a role of economy for the markets for the time being.
What could be the trading ideas for the new week?
I have two choices of actions; the first is RVNL which is Rail Vikas Nigam. The stock has been making an interesting chart for over two years now, as the stock has been trading more or less flat.
Over the past 10 months, the trading range has narrowed between the levels of Rs 26 which was support and Rs 35 which was resistance. This week, the action managed to break through that resistance and it tells us that a new movement will now begin. Traders can buy this stock with a stop loss at Rs 36 for a target increase of Rs 52.
And the second choice is an equally interesting action. I have a purchase on RBL Bank. Now if we look at the last 10-11 months of the chart and draw a downtrend line joining all the resistances which are all highs the resistance is around the levels of Rs 200-Rs 203.
So this is the exact price where it is trading right now and over the past two to three weeks. The stock has faced resistance between the Rs 200 and Rs 203 levels so this is a significant band. A break above this can take the stock to levels of Rs 225. So watch this resistance at Rs 203.50. I have a conditional purchase on RBL Bank. I suggest buying the stock if it manages to break above Rs 203.50 and initiate a stop loss at Rs 196 and the upside target for the stock would be Rs 225.