Have a buy call on Balkrishna Industries and a sell on HAL: Swati Ananda Hotkar

"The HAL counter is facing a very strong resistance at around Rs 2,500 levels and the last week we have seen a breakdown of that level that was the cluster support level and from breakdown onwards, we are witnessing continuous selling pressures in this particular counter," says Swati Ananda Hotkar, AVP-Equity Technical Research, Nirmal Bang Securities

What is happening with the market?
The overall view on the market is a bit cautious because from the last few trading sessions, we are witnessing that Nifty is facing a very strong resistance of 18,000-18,200. Unless and until it trades below that level, the view will remain cautious also. Small pullbacks can be seen in between this trading style but that 17,500 can be tested on the downside.

Whatever the pullback rally we are witnessing as of now, it would be a short lived one but the major concern is also Bank Nifty, which is trading below its 50 DMA and it is on the verge of testing the 100 DMA which comes to around 41,500 to 41,400 levels. That level can be tested. But we have to look towards the overall sectoral rotation in the market. It is a stock specific market but both the indices will be cautious because on every rise we are witnessing a selling pressure and around every support, we are witnessing some sort of a pullback.

We are witnessing a sideways consolidation phase in the market but the overall trend remain weak.

But what about the recommendations?
In this market I am giving calls on both sides. One will be on the buy side and the other will be on the sell side. Firstly, I am giving a buy call on Balkrishna Industries. Even in this kind of a correction market, the stock is really doing very well. It is trading in the band of the higher tops and higher bottom formations.

Momentum indicators on the technical front show a lot of strength in this particular stock. I believe it has a potential to reach up to Rs 2,380-2,400 level. So, one can take a long position in Balkrishna Industries at the current market price with the stop loss at Rs 2,190 levels on a downside for an immediate target of 2300 to 2320.

The second call is on the sell side; it’s on HAL. This particular counter is facing a very strong resistance at around Rs 2,500 levels and the last week we have seen a breakdown of that level that was the cluster support level and from breakdown onwards, we are witnessing continuous selling pressures in this particular counter.

I believe this correction is likely to continue towards the downside on HAL will be at Rs 2,380 levels. Currently the stock is trading at Rs 2,450. One can go for a short at the current market price. I am looking for a target of Rs 2,380 with a stop loss of Rs 2,600, just keep in mind these levels are the future levels.