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    Advice for HNIs: Be cautious, don’t bet big till US elections are over

    Synopsis

    Till the elections are over, we are advising clients to be very cautious with the trades and not to make big commitments, says Rahul Sharma.

    Rahul Sharma-Equity99-1200ETMarkets.com
    A medium term outlook will depend on the spike in infection and the second wave of Covid-19 in Europe and the US, says Rahul Sharma, Market Strategist & Research Head (Equity) Equity99 Advisors.

    How are the retail and HNI crowd approaching the market right now?
    If Nifty has a strong support at 11,700, then our advice would be to take fresh short positions for the short term. As these are very important resistance and support levels for Nifty, the market is likely to consolidate between 11,700 and 12,025 points and as far as the HNIs and retail sides are concerned, a medium term outlook will depend on the spike in infection and the second wave of Covid-19 in Europe and the US. As lockdown will be imposed again, it will bring negative sentiments in the market.

    In India, things are likely to be better as the recovery rate is increasing and Q2 numbers are coming up better than expected. Also, the government is focussing on a second stimulus package. FIIs are also buying up and that is a positive. But till the elections are over, we are advising clients to be very cautious with the trades and not to make big commitments.

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    You have recommended buying L&T Finance on declines. What are your targets over there?
    The L&T Finance results are weak but the commentary from the management is very positive. The company is the number one NBFC in India providing loans for farm equipment and thus rural-focused. It is also dissolving businesses which are not performing well and shifting focus to the farm equipment lending side.

    We heard from sources that the company will be wrapping up its mutual fund business and shift its focus to better earnings businesses like lending business. So from the second half of the financial year, the company will show good performances.Positional traders can take their positions at current market price with a stop loss of Rs 60, keeping targets at Rs 85 for the next three months.

    What about Praj Industries? What is the target there?
    A big meeting for ethanol policy is lined up for the development of the industry and it will have a big impact on the business. This will uplift the fundamentals of Praj Industries. The stock was trading in a range for a long time of which the higher range was of Rs 80 at which the stock is trading currently. The chart patterns indicate that these levels will be crossed in a short time and the positional traders can make their position at current market price, keeping a stop loss of Rs 74 and targets of Rs 100 in coming three months.

    What about Exide, your last pick?
    Amara Raja has posted really good numbers and we can see good demand coming up in auto and auto ancillary sectors and segments like tyres and batteries are doing very well in the replacement market. Exide Industries has the biggest market share in this segment. On charts, it is looking really good and positional traders can take their position at current market price with the stop loss of Rs 154 and keep targets at Rs 185 in coming three months.



    ( Originally published on Oct 28, 2020 )
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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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