ETMarkets Smart Talk | IndusInd Bank a buy-on-dip candidate till Q2 results are out: Vishal Wagh

By rallying almost 8 per cent last week, private sector lender IndusInd Bank was the top Nifty Bank gainer. In an interview with ETMarkets.com, Vishal Wagh, Research Head, Bonanza Portfolio, says the stock looks good for this week as well on the charts. “In the coming weeks, IndusInd is a buy-on-dip candidate till the quarterly result are out in the first half of October,” he says. Edited excerpts :

After the nearly 2 per cent dip that we saw on Friday, how bearish are the charts looking for this week?
Nifty has outperformed its global peers in the last six to seven weeks. Despite weak global cues, our market continues to rise but performing in isolation always becomes difficult, especially in current inflationary scenarios where geopolitical problems are continuously going on. Nifty has closed just near to 17,500 and upward sloping trendline from the low of June 2022. If it manages to hold Friday's low of 17,497, then bounce back to a semi-annual-pivot level of 17,782 is possible. On the other hand, if it breaks Friday's low then it will move towards 17,177-16,950 levels.

Do you think Nifty Bank will keep outperforming Nifty this week as well?
It is Nifty Bank which showed a strong bounce last week to see record high. But post that, it has also corrected and in the coming few weeks Nifty Bank will also see a healthy correction. All PSU banking charts are still bullish. It becomes very difficult for one sector to continuously outperform, specifically in an increasing interest rate scenario.

During the week, IT stocks were among the worst Nifty performers. Should traders continue to avoid this pocket?
IT stocks continued their bearish trend post strong pullback in a few formal weeks. But after last week's Fed chair’s statement, it has to resume the downtrend. The recession specifically in the US and Europe is going to be very bad news for the IT sector. So, the IT sector is definitely in the no-entry zone.

Amid all the sell-off, how do you read the outperformance of IndusInd Bank? What are the charts telling you for the week ahead?
Not only IndusInd Bank, the entire banking sector has managed to outperform broader indices. Among banking stocks, IndusInd definitely has a stronger chart at a given point of time followed by SBI and ICICI Bank. In the coming weeks, IndusInd is a buy-on-dip candidate till the quarterly result in the first half of October does not get reported.

With a rally of around 40 per cent in the week, Tata Investment Corporation has been a surprise. What are the key factors driving this surge? Do you see enough steam left in the stock?
The stock has given a sharp move in the last five trading sessions. It is currently trading in uncharted territory. So theoretically, the sky's the limit till there won't be any correction. Today, it has created a Doji pattern that indicates indecision making. So in our opinion, the strategy should be to wait for a correction or consolidation and review once it gets in the range of Rs 2,100-2,200.

Which are the 2-3 stocks that would be on the top of your radar for the week?
Sell Voltas in the range of Rs 920-940. Keep a stop loss above Rs 975 level for a target of Rs 860-830. The stock is seen trading in a head and shoulder formation on the weekly timeframe for the last one-and-a-half years and the neckline is at Rs 930-925 levels. The super trend indicator (8, 2) is indicating a change of trend from bullish to bearish and the momentum oscillator RSI (14) is at around 35 showing weakness by failing to sustain higher levels. Observations of the above factors indicate that a bearish move is possible in Voltas till Rs 870-830 levels.

Sell Ramco Cement in the range of Rs 750-780 with a stop loss above Rs 800 for a probable target of Rs 710-700 levels. Ramco recently witnessed rejection from a resistance zone and its 200-EMA of Rs 775 is showing a trendline breakdown which can be used as a confluence towards the bearish view. Momentum oscillator RSI (14) is at around 47 on the daily time frame showing weakness by rejecting higher levels. Observation of the above factors indicates that further downside in Ramco Cement is quite possible till Rs 700 levels.

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