Avoid long positions in Shree Cement & Amara Raja Batteries: Swati Ananda Hotkar

“Shree Cement is witnessing a very strong fallout or a correction of almost 4% and today it has just taken the support of 100 DMA which is a very good sign as of now. But 23,200 is acting as a very strong support. One should not take any major long position at the current market price. But those who have, should book their profits on every rise,” says Swati Ananda Hotkar, AVP-Equity Technical Research, Nirmal Bang Securities

What is the sense that you get about Nifty? Today is the expiry and you could just look at the January data and also tell us if that helps?
Definitely the view is a little bit cautious because in the last two days, we have witnessed some pullback rally but I will tell you that this pullback rally is likely to be short lived. 18,200 on the upside is acting as a very strong resistance level, Unless and until, Nifty gives a breakout of that level, we will not see a fresh buying position in Nifty.

On the downside, 17,800 and 17,700 are acting as a strong support level. I believe the overall view will remain sideways. We will not see either a breakout or breakdown. We might see the consolidation phase into the Nifty and a breakout on either side will decide the trend of the market.

The overall view is a little bit cautious as such because on higher levels, we are witnessing some profit -booking. I will suggest that one should be stock specific in this market but play each and every day with stop losses.

As of now, Bank Nifty is just moving in a sideways way as such, 42,500 is acting as a crucial support level, if it breaks that level then I believe that selling pressure is likely to be intensive and which might take the Bank Nifty towards 42200 to 42000 levels. So my view is to be a little cautious in the market. Do not create major long positions even though the volumes are a little bit low as of now. From yesterday, we are witnessing that. I believe the selling pressure is likely to continue on coming Monday as well.

What about stock specific recommendations for our viewers?
Since my view is a little bit cautious, I am giving two calls; one will be on the buy side and another on the sell side. On the sell side, it is Britannia. Why this particular counter? It is because on the technical front, we have already witnessed a very good rally up to 4,500 to 4,600 levels and from there onwards we are witnessing profit booking.

From the last few trading sessions, it is trading in the formation of lower tops and lower bottoms and it might retest its averages. So one can go for a short in Britannia at current market price upside. One should keep a stop loss at Rs 4,400 level. I believe it will retest Rs 4,230-4,200 levels on the downside.

Second is a buy call on LIC Housing Finance. This particular counter on the larger degree on the weekly and the monthly chart is really doing very well. It is on the verge of giving a breakout of my downward sloping trend line and in this kind of a market, it is well placed. All the important moving averages of 50, 100 and 200 DMA are trading in the formation of higher tops and higher bottoms. It has the potential to reach up to 530 levels. One can go long in LIC Housing Finance with a strict stop loss of rs 390 for an immediate target of Rs 430.

What is happening in the counters of Shree Cement and Amara Raja Batteries? Shree Cement is suddenly down 4% today and Amara Raja Batteries has been on a down trend for the last two three sessions?
Shree Cement is witnessing a very strong fallout or a correction of almost 4% and today it has just taken the support of 100 DMA which is a very good sign as of now. But 23,200 is acting as a very strong support. If it breaks that level, then the view will remain cautious in this particular counter and we might see moves up to 23,000 levels to 22,800. One should not take any major long position at the current market price. But those who have, should book their profits on every rise.

In the Amara Raja Batteries counter, for the last few trading sessions, we are continuously witnessing a correction. Now it is also trading below the 50 DMA as well. This selling pressure is likely to continue towards 530 levels and one should avoid the long position in this particular stock as well.

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