Market Correction Or Buying Opportunity? Kunal Parar Decodes Friday Trade Setup | Business News

[00:00:00]is here in the studios as always. Let's ask him about what the trade setup is looking like for this Friday.

[00:00:06]>> [snorts] >> Kunal, hi. Morning. Uh Seems like today we're going to completely undo all the good work from so far this week.

[00:00:13]>> No, no, not so far this week. Maybe for yesterday or such, but I would still believe that it's a you know, it's a healthy market. It's a very positive market, you know, because the kind of coupons which you've seen changing for the markets have been very, very positive. You know, I was looking at the week till date uh uh you know, graph for uh the sector gains. And I think if I'm not wrong, all sectors have actually given positive returns on a uh week till date basis, which means that even on uh the underperforming sectors like the pharma, IT, FMCG, even these stocks have actually started to show signs of strength uh and you know, maybe a good positive comeback. The the the best uh one of the better charts uh or the data points which you're looking out for is the improvement in market breadth, you know, almost uh uh the previous week we were discussing that there was almost 75 to 80% of the stocks which had fallen below their 20-day moving averages. That number is now uh down to almost 30 to 35%. So, that tells you that there's been a huge kind of an improvement across all the three major indices, the Nifty 50, the Nifty Midcap 50, as well as the Nifty Smallcap 50. Now, in that backdrop, when we look at this, this is a stark improvement our markets have shown. And that's why I would believe that uh you know, these one-off days of markets going to a correction, maybe extending uh the a sideways range for a few more days, I think that should be taken as an opportunity to buy.

[00:01:28]>> Okay. So, Kunal, what sectoral trends are you picking up in the market? And especially looking at IT, the weakness that we've seen, and today perhaps accelerated by Accenture's numbers.

[00:01:39]>> Yeah, uh so I think in that on that backdrop, real estate stocks apparently have done very well. So, you know, as a change, for example, the realty stocks have done very well. We've seen breakouts, a very cohesive kind of a breakout across most of the real estate stocks, right from the larger cap ones like DLF, etc. Moving towards the midcap and prestige uh you know Macrotech developers etc. So there are so many stocks which have actually shown signs of a breakout.

[00:02:03]That's almost like a new sector which is emerging as a potential breakout candidate. Financial services have apparently done very well for themselves.

[00:02:10]Banks, private sector banking names as well as the PSU banking stocks have shown very good recovery. So you know it's a market trying to balance off or offset the the the losses on the underperformance from few other sectors.

[00:02:23]Metals for example has been an underperformer broadly in the last one week 10 days we've seen almost like a 10 odd percent correction for the metal index. Yes, the last two days there has been a slight recovery. But in the context of the markets in the last 10 days back you know there's been a stark rotation in terms of the sector churn. So I think it's better to try and concentrate on sectors which either go into an underperforming spree to try and expect a recovery or a bounce into those names or come back into those performing sectors like real estate, financial services, banks etc. >> Mhm.

[00:02:53]What about IT? If there's a gap down today on IT, should you buy that dip really?

[00:02:59]Essentially that's what I'm trying to get to Kunal. What do you do?

[00:03:02]>> Not really. You should not be in a hurry to try and buy these names as of now because you know you know the prices have been attractive since last one month. But then if they keep on going to a discount or into a corrective spree, it doesn't you know enthuse a short term trader because there are two spectrums of the market we are looking at. The one spectrum is IT which is struggling because of its own reasons and the other is you know a healthy market where you have so many opportunities available. So I mean it's better that to try and you know let the time wise and the price wise bottom happen for these IT stocks.

[00:03:30]It's absolutely okay if you buy these stocks say 5% 7% higher when the base gets formed for these names. But it's always better to buy this on confirmation rather than on anticipation.

[00:03:39]>> Okay. And Kunal, your stock ideas for the day?

[00:03:42]>> So two buy calls. The first one which I would suggest would be a buy on HUL. That's a you know name which I think yesterday started to show signs of a breakout about 2200 levels on the spot basis. So, expecting a follow through up move for HUL given the market scenario.

[00:03:56]It could be possible that few of these defensive sectors could make a slight bit of a strong comeback by themselves. So, buy in HUL target of 2280, stop loss at 2180. The second will be buy in Adani Power. Even after you know, almost like a 15% correction to 10% correction in the last 1 month, the stock which corrected from I think 240 levels plus towards 220s up to 20 mark has made a very good comeback.

[00:04:21]Yesterday we saw the stock bouncing off from its 50-day moving average. Very good volumes up until seeing in the last couple of days. And again, positive data points from the indicators. So, expecting an up move for Adani Power.

[00:04:32]Buy with target of 244, stop loss at 223.

[00:04:37]All right.

[00:04:38]Those are those are the topics coming in from Kunal. What we'll do is take a very short break, come back with more. Plenty of stocks which will will be on our radar this morning. You want to stay tuned. We'll talk about all of those on the other side of the screen.

[00:04:56]>> [music] [music]