Podcast | Stock picks of the day: 'Nifty likely to hover in 10,600-11,000 range'

Jayant Manglik

The equity benchmark indices ended Tuesday's session marginally in the green, indicating some consolidation. Nifty index traded in a narrow range throughout the session before closing 0.2 percent higher at 10,934 levels.

The broader market indices continued their underperformance, with BSE Midcap and Smallcap indices closing lower by 0.5 percent & 0.9 percent, respectively.

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The sectoral indices exhibited a mixed trend. Consumer durables, auto and banks registered healthy gains, while realty, power, capital goods, metals and FMCG witnessed selling pressure and closed in the red. Globally, the European markets were trading on a positive note.

The big event to watch out will be the RBI's monetary policy review meet which is scheduled this week and the outcome will be announced on February 7. We're in the third month of the consolidation and still there's no clarity.

We feel that Nifty may continue to hover within 10,600-11,000 zones. However, the divergence between the benchmark index and the broader markets remains a cause of concern.

We've seen a sharp slide in stocks across the board and that has certainly dampened the sentiment. On the sectoral front, IT and FMCG pack showed resilience last week and we expect this to continue while others may continue to trade mix. We reiterate our view of maintaining focus on stock selection and trade management aspects.

Here is a list of top three stocks which could give 5-7% return in the next one month:

Kotak Mahindra Bank: Buy| LTP: Rs 1,277| Target: Rs 1,360| Stop-Loss: Rs 1,220| Return 6.5%

Kotak Mahindra Bank has been consolidating within 1200-1350 for the last two months after witnessing a sharp rebound from the support zone of 1000 levels.

It is holding strong above the support zone of moving averages ribbon on the daily chart and looks set for a fresh surge. Traders shouldn't miss this opportunity and accumulate within 1260-1270 range.

Pidilite Industries: Buy| LTP: Rs 1,125| Target: Rs 1,190| Stop-Loss: Rs 1,085| Return 5.7%

After making a new record high, Pidilite Industries witnessed a marginal correction and consolidated around the support zone of 100-EMA on the daily chart.

It has spent over five weeks around that zone and formed a fresh buying pivot. The overall chart formation is also in sync. We advise creating fresh longs in the given range 1110-1120.

Bajaj Auto: Sell Feb Futures| LTP: Rs 2,711| Target: Rs 2,540| Stop-Loss: 2,750|Downside 6%

Most auto stocks are currently struggling and Bajaj Auto is no different. It declined sharply after the consolidation breakdown but oversold positions have triggered marginal bounce of late.

We feel it is a temporary rebound and would fizzle out soon. Traders are thus advised to use this shorting opportunity and create shorts within 2680-2700.

(The author is President, Religare Broking Ltd.)

Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. First Published on Feb 6, 2019 08:28 am