Phoenix Mills, Parag Milk Foods among top buy ideas for this week: Anand James

“The lifetime peak which we saw towards the end of last year, stands a high chance of revisiting soon. However, the RBI rate decision scheduled for 8th June may have a say on the momentum,” says Anand James, Chief Market Strategist at Geojit Financial Services.

In an interview with ETMarkets, James said: “The signals from Bank Nifty, as well as persistent buying interest from the 18480 region, encourage us to look forward towards seeing 18750 or even 19070” Edited excerpts:

The Indian market is likely to close flat with a positive bias. We touched 18600 levels in the week gone by. What led to the price action on D-St?
While the full achievement of the measured objective of 18660 applied the brakes on the buying spree, the US debt deal news flow held sway over the global sentiments which pushed the Nifty50 into a consolidation mode.

This meant that while Nifty showed no vigor to push beyond 18660, thus leading to a turn lower, but bargain buying emerged as soon as dips turned substantial enough, thus avoiding major falls as well.

Meanwhile, the MSCI rebalancing, which also saw net addition as well as net reduction to many Nifty heavyweights also added heft to Nifty’s swings on either side.

Further, after eight days of consecutive buying, FIIs turned net sellers on Thursday. However, this data needs to be read with the fact that May recorded their highest monthly inflow in the last year.

Do you see Nifty50 hitting record highs in the coming week?
Bank Nifty poses some clue about this, as it was the first to reach the vicinity of the peak. After a brief foray above the peak, the turn lower was disappointing, leading to a few anxious moments.

In fact, the recent performance of Bank Nifty was not similar to what is usually seen on the approach to significant peaks.

And yet, since the turn lower has not attracted enough momentum, and with Friday leading to the formation of an inside bar, the hopes of a renewed attempt to get back to the upside trajectory is high.

With Nifty, we have already seen the full achievement of the 18660 objectives, which we had lined up at the start of last week.

A near-200 point pullback, post achievement of the same, underscores the significance of the objective and probably hints towards the completion of a near-term uptrend.

However, the signals from Bank Nifty, as well as persistent buying interest from the 18480 region, encourage us to look forward to seeing 18750 or even 19070.

Thus, the lifetime peak which we saw towards the end of last year, stands a high chance of revisiting soon. However, the RBI rate decision scheduled for 8th June may have a say on the momentum.

What led to price action in Realty and Consumer Durable stocks?
Realty space was driven by gains seen in Macrotech Developers, Godrej Properties, and DLF which together form 64% of the BSE Realty Index.

Among them, Macrotech Developers led the rally as the stock gained after it turned ex-bonus this week.

In the Consumer durable segment, Titan Company and Havells, which forms 60% of the BSE Consumer durable index, drove the index this week.

Top gainer Titan picked up pace after it posted a ~50% rise in quarterly profit compared to the same quarter last year.

Oil & gas suffered the most – what is weighing on the sector?
The sector came under pressure due to weakness seen in ATGL and Reliance Industries this week, on account of MSCI rejig, which led to outflow from RIL as well as exit from ATGL.

Any strategy that one could deploy on Nifty or Nifty Bank?
Being in the vicinity of record peak on both, a range expansion may be played for. With RBI rate decision scheduled for 8th, when the weekly expiry will also happen, and since there was range contraction last week, one could consider long strangles in the 15th of June contract, as the week progresses.

Smallcap and Midcap did outperform Sensex in the week gone by – how should one play the broader market theme in the coming week?
Since the reversal started towards the tail end of March, Midcaps and Smallcaps outperformed Nifty gaining 16% and 18% respectively.

Midcap and Smallcap indices have been consecutive gainers for the past 10 weeks and are slowly moving into the overbought region which might bring in some profit booking/sideways moves next week.

However, as both the indices have seen a triangle pattern breakout on the weekly time frame indicating that medium to long-term prospects still remain good, we should expect such consolidation to be bought into.

Any thematic stocks which are on your radar for a short to medium-term basis?
Here are a few trading ideas -

Phoenix Mills Ltd: Buy| Entry range: 1465-1493| Target: 1580-1720| Stop Loss: 1375

A flag breakout in the weekly time frame is still alive. Also the MACD in the weekly time frame has moved above the signal line indicating positivity in the coming weeks as well. We expect the stock to move towards 1580 and thereafter towards 1720. All longs may be protected with stop loss placed below 1375. A buy-on-dips approach may be employed.

Parag Milk Foods: Buy| Entry range: 102-106| Target: 112 - 120| Stop loss: 97

The pullback that has been on since April saw a minor correction in the later part of May but after a meaningful 23.6% retracement, we have seen a strong bullish Marubozu candle on daily charts indicating positivity in the coming weeks.

Also, the MACD in the daily charts has shown bullish exhaustion supporting our expectation of a continuation of the uptrend. We expect the stock to move towards 112 and thereafter towards 120. All longs may be protected with stop loss placed below 97.

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