Power stock value buy post consolidation; NTPC, Power Grid, Coal India top picks: Kunal Shah

In an interview with ETMarkets, Shah said: “Going forward we will see a lot of buying action in the space, and quality names should be accumulated on dips. Stocks such as NTPC, Power Grid, and Coal India remain top picks,” Edited excerpts:
Indian markets closed flat amid volatility seen in the second half of the week. What led to the price action?
The Nifty index witnessed some buying momentum at the start of the week which was majorly supported by Reliance.

There was no broad base buying visible in the Indian markets which led to no follow-up move. The BANK NIFTY index continued its underperformance post the budget and faces a hurdle at 42000.

Where do you see Nifty heading in the coming week? Which are the levels which one should track for the coming week?
The upcoming week is likely to be volatile for the Nifty index, however, the undertone remains bullish as long as the index stays above the level of 17700.

The immediate hurdle on the upside is visible at 18200 and once breached will see a sharp short covering on the upside towards 18600-18800 levels.

Any important events that one should track in the coming week?

All the major events have been over in the past 15 days and there is no such major event lined up that will have a significant impact on the markets.

In terms of sectors – metals, and capital goods led the gains. What triggered price action?
Metals stocks are linked with global prices hence they are very volatile in nature. The metal index on the technical chart has found support at 5600 which is acting as a cushion.

The index is witnessing recovery toward the level of 6000-6200 levels which coincides with 200-DMA.

Post the budget capital goods is one sector that the government is focused on and that led to a majority of the buying in the sector.

Utilities and power stocks took some beating in the week gone by. What led to the price action?
Power stocks witnessed mild consolidation in the previous few trading sessions. The undertone remains extremely bullish on the sector.

Going forward we will see a lot of buying action in the space and quality names should be accumulated on dips. Stocks such as NTPC, Power Grid, and Coal India remain top picks.

Finolex Cables rose more than 20% in a week. What should investors do – buy the dip, sell or hold?
Finolex Cables has given a strong breakout on the daily chart with a sharp surge in volumes. The stock has broken out from a cup and handle pattern which is a bullish structure.

The stock remains in buy-on-dip mode with strong support at 600 levels which will act as a cushion. The stock has the potential to touch the target of 800.

Any stocks which are value picks at current levels and why?

1.) L&T: Buy at Rs2230| Stop Loss Rs 2180| Target Rs 2280/2320| LTP Rs 2226
L&T has given a breakout on the daily chart with a sharp surge in volumes and has surpassed the immediate resistance of 2215. The momentum oscillator RSI has crossed the level of 60 which confirms the strength of the stock.

The MACD indicator has given a crossover near the zero line which confirms the buy signal. The support on the downside is visible at 2180 and the upside potential targets are 2280/2350.

2.) UltraTech Cements: Buy at Rs 7300| Stop Loss Rs 7100| Target Rs 7600/7800
UltraTech Cements has witnessed a strong breakout on the daily chart with a sharp surge in volumes. The momentum oscillator RSI has given a positive crossover on the daily chart which confirms the buy signal.

The lower-end support is visible at 7100 and the upside potential targets are 7600/7800.

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