IGL & BEML which rose more than 20% in a week: should you buy, sell or hold?

“Nifty is trading near critical trendline resistance of 17700 but the momentum is intense where Nifty may easily break this level to head towards 18000/18100 levels,” says Santosh Meena, Head of Research, Swastika Investmart Ltd.

In an interview with ETMarkets, Meena, said: “There is a 'risk on' situation in the market where high beta spaces like banking and metals are outperforming while the defensive FMCG sector is underperforming,” Edited excerpts:

What a week for Indian markets. Both Sensex and Nifty50 were up 1% and reclaimed crucial resistance levels. What led to the price action?
It was a stellar week for the market where both Nifty50 and S&P BSE Sensex continued their northward journey. The main reason for the rally in the market is the "FOMO' factor among the FIIs after the Nifty managed to come back above its 200-DMA smoothly without entering into the beer market.

FIIs who were selling at 15,500, are now buying aggressively at 17,500. Apart from this, improved global cues, easing inflation worries, and strong corporate earnings were major factors to fuel the rally in the market.

What should be the trading strategy for the coming week as Nifty50 trades around 17700-17800 levels?
Technically, the Nifty50 is trading near the critical trendline resistance of 17,700 but the momentum is intense where the Nifty50 may easily break this level to head towards 18,000/18,100 levels.

However, if the Nifty50 pauses near 17,700 level then there is a probability of some profit booking where 17,400-17,200 will be immediate demand zone.

India celebrates its 75 Independence Day on Monday. If someone plans to get into trading, can he/she become financially independent? What are the key things one should keep in mind before becoming a full-time trader?
Trading looks lucrative, but it is not easy to make money in trading because you have to deal with your emotions along with market volatility to make money and data tells that less than 10% of active traders make money.

Trading requires a different mindset and skills; therefore, you should start it part-time to understand whether it is working for you or not and then gradually you can move to full-time trading.

One should move to full time trading if you continue to make a consistent profit by sticking to your system.

IGL and BEML rose more than 20% in the week gone by. What should investors do? What does the chart suggest?
IGL: It is bottoming out after a long period of underperformance, and it managed to move above its 200-DMA; therefore, investors can accumulate this counter despite a recent rally. On the upside, we can expect a move towards the 480 level while 400 will act as a base on the downside.

Tata Chemicals: The stock is witnessing a strong bullish momentum after a long period of consolidation. In the near term, it looks a little overbought but overall structure suggests much more upside towards the 1500 level. On the downside, 1070 is the immediate support level while 1000 should act as a floor for this counter.

BEML: The stock has witnessed a sharp upswing in recent days however 1800 is an important trendline resistance; above this, we can expect a move towards the 2100 level while if it pauses near the 1800 level then it may see some pullback towards the 1600 level. This stock should be taken as a momentum play rather than an investment pick.

Sectorally, metal rose more than 4% while FMCG fell more than 1% in a strong market. What led to the price action?
There is a 'risk on' situation in the market where high beta spaces like banking and metals are outperforming while the defensive FMCG sector is underperforming.

Market recouped losses and turned positive on a YTD basis. Do you think Nifty could reclaim 18000 in the August series?
As I said Technically, Nifty is trading near critical trendline resistance of 17700 but the momentum is intense where Nifty may easily break this level to head towards 18000/18100 levels.

Any freedom picks for investors for independence day week?
The momentum is strong in the market where Nifty and Sensex are doing well because of FIIs' buying but many pockets in the market are outperforming.

In large caps, the power stock NTPC is looking lucrative whereas, in midcap space Chalet hotel, Gujarat Flurochem, and KPIT are showing strength to witness double-digit returns in coming weeks.

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