Not Kotak or HDFC Bank, 2023 belongs to Axis Bank: Vishal Malkan

“I do not think Kotak and HDFC Bank have that kind of bang right now to have a breakout in terms of medium term charts. I think the focus has shifted or the patterns have shifted more to private banks like Axis Bank and ICICI Bank. Axis Bank is the best bet in that category. 2023 belongs to Axis Bank,” says Vishal Malkan, malkansview.com

The Indian market continues to be very volatile with sharp moves both on the upside as well as the downside. How does one navigate through this and what is the trading strategy?
I think it was a very healthy correction which we saw last week in technical terms because we had a stupendous rally for almost two months especially in the banking sector and the PSU banks. This correction gave a great buying opportunity. When we say buy on dips, I am definitely bullish especially on the banking sector and especially on the PSU banks. And 42,000 or 41,700 was a major support for the Bank Nifty. Once it breaks, then only will there be further downside to it. Otherwise, use all dips to buy.

What is your take on the defence basket? I cannot ignore the kind of stellar moves that these stocks have given their shareholders in the long term. Even in the last month, a lot of these names have been abuzz. Going into the next year, what is your top defence stock?
I will go for HAL, which has given a fantastic return in the last few months. A good correction, good mean reversion has happened on the weekly chart as well with strong support on the levels of 2400. This becomes a very good risk reward ratio trade with a stop loss of 2,450. We can buy HAL for a target of around Rs 2,800-2,900 in the next quarter.

I know the history is very limited for some of these fresh IPO names but if you have to hazard a guess and maybe take a call on some of the new-age tech companies, is there anything that you would want to pick out and suggest?
These stocks are into a kind of intermediate downtrend. Of course, there is a good bounce today but it does not convince me of an investment opportunity. I would look more from a trading perspective. For a medium to long term investment, I am definitely looking at the PSU sector and the auto sector.

What is your top pick in the auto sector then?
Top pick would be from auto ancillary. Apollo Tyres has given a multi-year breakout and is sustaining at Rs 300 levels. That is the best bet in tha sector with a stop loss of Rs 300. We can look at targets of Rs 400-420 in the next quarter.

One space which has the Street clearly divided is IT. There are people who believe that the correction is now good enough to start nibbling into the sector. There are others who believe that maybe the time correction is likely to stay here for a longer period of time. How are you gauging the IT sector and is there any stock on your buying list?
I would agree with both the things you said. One is that in terms of price, the correction is decent and the levels are very attractive. On monthly charts, they are at major support but definitely there is some time correction left which can take another quarter or so before they start bouncing off. We can never time the market but if the price is good and the risk reward is less, this is the best time to get into IT stock for a medium to long term investment.

We have been talking about the stocks which have been doing well but what about HDFC Bank and Kotak Mahindra Bank? They were stark underperformers of 2022. Are they set for a reversal in 2023?
I do not think Kotak and HDFC Bank have that kind of bang right now to have a breakout in terms of medium term charts. I think the focus has shifted or the patterns have shifted more to private banks like Axis Bank and ICICI Bank. Axis Bank is the best bet in that category. 2023 belongs to Axis Bank.