2 top stock recommendations from Jay Thakkar

“And for Bank Nifty I would say that level is 43,700 for the short-term reversal. From intraday perspective, it has already broken the support of 44,000. So, let us see on a closing basis if it manages to hold on to 44,000, bounces back, then there is a possibility that it can get into that upper end of the range which is 44,300-44,500. But then closing above 44,000 would be important,” says Jay Thakkar, Sharekhan.

Do you think 18,500 will turn out to be a good support or this time we may actually take a deeper knock on the downside?
Overall, as far as Nifty is concerned, yes, 18,500 on intraday perspective is important. On a positional perspective I would say 18,400 is very important support. So, medium term or a short-term reversal will be below 18,400, that will be confirmed below, I would say rather below 18,400 because if that happened, so then Nifty is definitely going to correct the entire rise from 16,800 to maybe 18,650-18,660 that is what we have seen until yesterday. And for Bank Nifty I would say that level is 43,700 for the short-term reversal. From intraday perspective, it has already broken the support of 44,000. So, let us see on a closing basis if it manages to hold on to 44,000, bounces back, then there is a possibility that it can get into that upper end of the range which is 44,300-44,500. But then closing above 44,000 would be important.

So, the strategy for the day should be a bull call spread wherein one can buy right now, maybe a covered call on a futures wherein you can buy right now and also sell the higher call options so that you are hedged. So, in case there is no bounce, the loss is limited because you are already trading below the crucial support level of 44,000 there on Bank Nifty.

Small cap, midcap side of the market, any trading ideas there?
Yes, absolutely. I would say that overall midcap index has definitely given a very nice breakout above the levels of 33,000 and moreover above the levels of 33,200 which has confirmed the long-term breakout.

In fact, we have seen midcap rallying for almost nine odd weeks of consecutive positive closes. So, there can be some profit booking of course, but now on the lower side on midcap 33,000 is an immediate support and till it is trading above those levels, I would say that overall trend will be bullish out there.

And as far as the Nifty small cap index is concerned, 10,200-10,300 is the range to watch out for. A close above 10,300 would thereafter get a breakout like that of Nifty mid cap.

Couple of stock or ideas which I like as far as the midcap, small cap ideas are concerned. So, one among that is Affle India and the stock is trading around the levels of 950. The kind of positive divergence which we are seeing on the daily charts and the kind of bullish crossover that we have seen on the weekly charts out here, I think the stock is ripe for a bounce back.

The upside we can see the levels of almost 1000 to 1040 in the near term.

On the lower side now 915 will be a good support level. So, Affle can be bought at the current market price targeting 1000 to 1040, I mean that is where we are seeing good amount of reversal coming in.

Let us talk about some of the midcap, small cap which appear to be breaking out. One is NRB Bearings. It was up yesterday 10%, other 15% today. Is this breakout? What kind of levels can be seen in this one?
Well, yes, NRB Bearings has definitely seen a good reversal, I would say, today. In fact, the stock is trading in a range and in that process, I would say, it has formed a symmetrical triangular pattern. So, on the upside, it has got a target of around Rs 178 in the near term and above those levels we can see Rs 185. So, breakout would be confirmed above Rs 185 only. Till then, it is just trading within this range, Rs 185, towards the lower side Rs 125.

One more stock that we should talk about is Eureka Forbes. Post its numbers, we have seen that run up coming in, yesterday up 12%, today up almost 8% to 9% as well. What are the indications on charts for this one?
As far as this stock is concerned, we have very less data. However, on the lower side, I would say that for this stock, 468 in the near term is a very crucial support and till those levels are held, it can bounce back.

Otherwise, it is just into a consolidating range, I would say, on the upside, around Rs 510, Rs 515, Rs 520 and on the lower side around Rs 450 to Rs 470 that is the range within which this stock is trading. But I would say that for the short to medium term, once the consolidation is over, we can see a good upward movement.