Two Adani group stocks Nooresh Merani is betting on

"If I have to bet on Adani stocks, it would be on Adani Ports and Ambuja Cements; there is a good enough institutional force. So, when the recovery comes there could be some upside," says Nooresh Merani, independent technical analyst. Edited excerpts:

17,500 is where we made a bit of a bottom on Friday. From here on, do you expect a secular rally on the upside or could there be further downside come Monday morning?
I would not take a call for the next two or three sessions. What we are seeing is purely localised moves and also the fact that when momentum begins in the largecap space and the heavyweight space, we can see some impact. So, we have seen the impact in the last two sessions come out of nowhere. But any of the risk parameters which I look out for in terms of a bigger trend playing out have not really given a breakdown. You look at the dollar index, nothing has happened; you look at global markets, nothing has happened.

Interestingly, the US markets are 1% away from a three-month high. All across it is the same. At the broader market level, the returns have not been great over the last one, one-and-a-half years so the opportunity is there.

If you can manage the next 3-4% of risk, which could happen purely of the budget because even on the days when we had the worst possible impact, the next day the markets fell by 4%. We cannot go from 10% LTCG to 20%; that is what the market does not expect. The fact is with all the events which are there, there is a risk of 3-4% but as an investor, you want to get in right now.

So, the view is over the next two sessions, if you are an investor, go ahead and deploy 40-50% of the cash and the rest post Budget. As a trader, you cannot take a lot of trading positions because you do not want to be on a gap up or a gap down without a view and an event is not something you have a view on because if you are trading technical, you are trading momentum and as of now the momentum is on the downside. As a trader, you want to be light but as an investor, it is the time to jump in.

Which stocks, if at all any from the entire Adani Group, have become a buy now?
I will split the Adani Group companies into two. One is companies like Adani Ports and Ambuja Cements, which is where there is institutional holding in terms of FIIs and DIIs. That is a place where the correction is also large enough. These are the companies where a trade can be done.

But if you look at the rest of the names, they are still up 10-20-30X from pre-COVID levels. I am not talking about from COVID bottoms but from pre-COVID levels and these are the places where the institutional holding is pretty low, the float is not very great. So, what happens is when the downturn comes, it is difficult to take a trade.

If I have to bet, it would be on Adani Ports and Ambuja Cements, that is where there is good enough institutional force. So, when the recovery comes there could be some upside.