What are charts suggesting? When will this fall in markets take a halt?
Aditya Arora: Look, the texture has been weak and we had highlighted in our last interaction also that Nifty looks weak at 25,900. Since then, we have come down 1000 points. But 24,700 to 24,800 is an important support for the market. We must watch out if this level holds out, then we can see a short-term bounce in the market, but more worrying is the weakness in smallcap and midcap space. I think that space has little more room on the downside because a lot of stocks are breaking below their swing lows so look at PSU banking space, it is down 2.8%. So, the weakness is in smallcap, midcap space. One must wait for the dust to settle down in that pocket. And when we talk about the largecaps, they have better risk-to-reward ratio. So, I will closely watch out for 24,700 to 24,800 mark for Nifty to bounce back. I am cautiously optimistic and am playing for a short-term bounce in Nifty, having a stop loss of 100 to 150 points on Nifty and hoping for recovery of about 200 to 400 points on Nifty.
Within all of this setup, there are select names from IT and pharma which are holding out. Do you see some sort of outperformance from these two segments and any stocks there?
Aditya Arora: Absolutely. Whenever there is tension on the street, there is worry on the street, FMCG and pharma are safe places to hide and the stock which stands out today is ITC which often shows outperformance in a falling market, so I like that candidate at 513.60, one must place stop loss at 495, target should be 527 to 545.
What about your recommendations, any individual names that you are liking?
Aditya Arora: So, I have ITC in my recommendation list and which I have already shared, so that is the only stock which I am watching out for today.
When it comes to PSU stocks, how are you looking at them? The weakness continues to be a bit much more specifically when it comes to the PSU and PSU Bank Index.
Aditya Arora: I think the deterioration is a little worrying in this PSU basket because they are breaking their previous swing lows, so technically that is negative. I would wait for the dust to settle down if there is a bounce back in Nifty. This space can also bounce back, but I am not hoping for outperformance. I am just hoping that they bounce back along with the market, but this is not the pocket where huge wealth could be created. I am actually looking at largecap space, which is expected to do well, according to me, and I am also watching Nifty Metal space which has been consistently outperforming the market and the outperformance may continue.
Just wanted to take stock of some of the other big buzzers from the broader markets. You do have Macrotech Developers doing quite okay, AU Small Finance Bank, LTIMindtree is also something which is perking up, and Finolex Industries is at that. Anything that caught your attention among some of these buzzers?
Aditya Arora: I think Lodha is actually bouncing off from its important support. So, one can hope for a recovery of more 5% from here. But important point to notice is that internationally also IT is doing well and you mentioned LTIMindtree, so I will follow a level based approach over here.
I will be bullish on LTIMindtree above 6400. Right now the stock is at 6217 and stop loss would be 6150 and target should be 6550 to 6650.