2 top stock recommendations from Rahul Sharma

"We believe that this is a good chance to buy this dip in case we retest 18050 on the downside. I think that will be again a re-entry point where fresh money can be put in and we are optimistic that Nifty should be aiming towards the 18500 mark by the monthly expiry," says Rahul Sharma, JM Financial Services.

Yesterday when we broke out of 18100 we thought that uptrend is something that will continue but given the handover, it is a bit wobbly. Where do you see the markets at? What is the range to watch out for both for Nifty as well as Bank Nifty?
Yes, it has been a choppy recent few days that we have had but the silver lining is that leadership is emerging from the sectoral place. Clearly there is leadership coming in from the capital goods, from metals, as well as the PSE sector.

So we believe that this is a good chance to buy this dip in case we retest 18050 on the downside. I think that will be again a re-entry point where fresh money can be put in and we are optimistic that Nifty should be aiming towards the 18500 mark by the monthly expiry.

So the bias remains positive on Nifty backed by strong leadership coming in from sectors and Bank Nifty which has been a relatively quiet index since many days could see a good round of surprise happening once the double top of 42700 is taken out.

Bank Nifty also remains an index which is continuously hitting lower, higher lows and now there is a chance that we should see a breakout happening anytime soon.

So our outlook is stay with sectors which are strong and out of that I think these three sectors have the limelight and we believe that any dips from here could be good buying opportunities from a positional perspective especially going into the Union Budget.

Buying on dips is a strategy at the Nifty level and for Bank Nifty, I guess given the fact ICICI Bank and Kotak Mahindra Bank come out with its earnings on Saturday. We will probably see that breakout happening post that and the market is waiting for that. Just wanted your take regarding the IT pack as well that is outperforming today plus your stock specific recommendations?
IT as a sector definitely seems to have reversed and we believe that there is more upside to the index. It is a bit of a mixed index for sure not as strong as some of the other sectoral indices but things are definitely not looking negative for IT as a pack.

I think there is a big shift that is happening in the private banking space. HDFC Bank seems to be taking charge taking leadership in the private banking space and we believe that there is a good upside to be had in the next two to three months’ time frame. We have taken a bold call and advised our clients to move from other private banking names like ICICI, Kotak, IndusInd Bank and move into something like an HDFC bank where we feel that in the next two to three months we could very well be headed for a Rs 1800 price target on the upside and this could be one stock which also could help the Bank Nifty breakout from the current consolidation rate. So very positive on private banks as such.

And the second recommendation that we have is on the delivery side. We believe the Make In India theme will continue and one of the plays over here is Redington. This stock is ripe for another round of up move. We believe that there is a good 10% to 15% kind of an upside that can be had from current levels. Redington can be bought around current levels of 190 odd and the stop loss can be placed at 178 and we believe around 225 is what the immediate target for the stock is.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)