2 top stock recommendations from Gaurav Bissa

"If somebody wants to buy afresh, then yes, I would wait for a decline towards 18450-18500 so that the risk reward is in our favour," says Gaurav Bissa, InCred Equities

Talk more about index technicals. Where do you see it go because there is an urge to book profits as well, people who have been riding so far? On the other hand, many say that this is the start of a new up move because it is a breakout of that congestion zone 18400-18500 which we were facing last couple of days. Which side of the argument are you on?
If I were to pick a side, then of course it has to be on the upside. As you rightly mentioned that 18450 was the previous swing high and the index is still forming a series of higher tops, higher bottoms. From that perspective, the fresh lifetime high is what I would be playing for.

If somebody wants to buy afresh, then yes, I would wait for a decline towards 18450-18500 so that the risk reward is in our favour.

But eventually, I think Nifty can test levels of 18900-19000 in the month of June. An interesting aspect, Nifty has been sustaining about 21day exponential moving average on daily charts. It has not gone below or rather closed below these levels for a couple of months now. I think that can be used as a trailing stop-loss mechanism and on the upside, 19000 is what I would be looking for Nifty.

Which are the stocks on your radar at this point of time?
Some of the stocks that are on the radar, first one would be Nalco, National Aluminium. Overall, the metal space has been in a lull. It has not done so much over the last few months but now, I think in June series, we can see an uptick sort of coming in Nifty Metal Index. And Nalco for one has given a breakout on daily charts. If you look at the Bollinger Bands, we have seen an expansion of the Bollinger Bands on weekly charts as well so looking quite robust. One can keep a stop-loss of Rs 82, buy Nalco for a target price of Rs 92.

Second stock would be IRCTC, where it has done nothing so far. On longer time frame it has made a double bottom pattern formation happening, trading above the neckline as well. On daily charts we are again seeing fresh breakout happening. It is giving a buy signal on Ichimoku studies as well. So IRCTC is another name that would be on my radar. Stop loss can be kept at Rs 615 for the target of Rs 665.

Some of the mid cap stocks I want to discuss with you, especially in this home finance side of the market. Look at Repco Home Finance that one has come out after a long time. Can you talk to us about levels to watch out for over there?
Certainly. So if you look at Repco Homes, we have seen consistent formation of higher tops, higher bottoms on the daily charts so the trend is shaping up quite well. However, if you look at slightly longer period, it is about to witness a hurdle that will be around levels of Rs 245. So it can go towards Rs 245. The fresh breakouts would be on a daily close about Rs 245. It will be giving a falling trend and breakout. Second, it will be crossing the previous swing high hurdle as well. So on that perspective, it can pick up pace. It can see another 7% upside in a swift manner. But for the time being, I think Rs 245 is where it can see a halt of the current rally.

HDFC twins have been the key laggards in the market at this point of time, from the financial space. Do you see the trend reversing for them or do you expect the consolidation to continue till at least the merger overhang is out?
Things are is looking quite interesting and if you look at HDFC Bank, that would be on my radar as recently we have come out with a report as well for futures. And it is bouncing from a channel support area. As long as it is holding levels of Rs 1580, Rs 1590, in the current series itself in the month of June, we can see a move towards level of Rs 1720.

Once it gives a close of Rs 1720, Rs 1725, there can be a fresh uptrend to speak of and the stock can go towards Rs 2000 in a matter of two months. So in my opinion, among the two, HDFC Bank looks in much better position. This is what I am in much favour for buying at this point of time. I am not saying HDFC is weaker one. It can see some time duration but I do not see a major price correction so to speak of. But HDFC Bank can be bought with the current price as well.