Weekly Market Wrap: Nifty, Bank Nifty & Top Stocks That Moved the Market | CA Rudramurthy's View

[00:00:04]Back with markets at noon and time now to get into a technical conversation. Pardon me with our technical guest. We've got Mr. Rudramurthy BV of Vachana Investments joining us on the show. Rudra, hi. Good afternoon. Good to be speaking with you as always. Um, you know, Rudra, just give us some sense on how you're reading the market right now because so far for the week, because we had positive geopolitical developments over the weekend. So, so far the week was good and then you've got this Accenture numbers and on IT and overall Indian markets. Do you believe that this is a one-time blip that we're seeing in the markets and let's say come next week, the market sentiment should recover? Is that something that the charts are indicating?

[00:00:42]>> May, good afternoon. Thanks for having me in the show. See, last week at around 23,000, when you got that gap down open, I was very bullish. I said, "Buy this gap down, you will see a thousand point move." And that has already happened.

[00:00:55]But, what is very important now is the risk-reward to go long here, especially if you're taking a fresh long position on the index, is definitely not good because the upside is limited. If you see Nifty, short-term resistance is at 24,300 zone. So, the next support for Nifty from current level is 23,800.

[00:01:17]So, for me, 23,800 support and resistance at 24,300 and we are right in between and risk-reward for me does not favor a fresh long in index at current market price. And most important, last two, three days, especially Bank Nifty has started underperforming Nifty. And you have to also understand, after a big move what we have seen in last one week, even if this positive sentiment comes out this weekend, I will expect next week some amount of gap up open and then a profit booking which can come on Monday. But, I'm not sounding bearish on market. I'm only telling after a thousand point move, buying fresh longs in index right now is not a good risk reward trade. So, I will wait out for a dip and then look at entry closer to 23,800.

[00:02:07]But, if you're a very, very short-term trader, yes, I expect this positive news to come out this weekend and you will see a gap up open on Monday where you can book some profit. And Bank Nifty for me has a support at 57,000 and resistance now is at 58,000. So, at this juncture, no fresh long entry in index.

[00:02:26]Be stock specific. Wait for Monday gap up and then book some profit and use only dips to enter fresh for a new positional long side in this market.

[00:02:36]>> Understood. Rudra, you know, I have to ask you before I ask you for your picks, of course. The kind of move that we've seen in IT, already the valuations on the fundamental side at least are at very massive five-year discounts. And speaking purely on technicals, the kind of cuts that we valuations on the fundamental side at least are at very massive five-year discounts. And speaking purely on technicals, the kind of cuts that we've seen on large cap ITs between 6% and 7%. Does that kind of cut warrant a buy on some of these names?

[00:03:05]>> Let me be very, very clear. People are calling this valuation being cheap now for a long time and you would have lost enough money being buying on this cheap valuation. Let me make it too simple.

[00:03:17]When there is a hit on business structure itself, especially in IT because of AI, don't try to catch a falling knife. I will be in fact happy to buy higher than trying to catch a falling knife and then see further more cuts. Undoubtedly, stocks like TCS, Infosys, they're all blue chip stocks, very, very good companies. But, then what is important is the entire business structure is changing because of AI and I don't want to catch a falling knife keeping valuation or margin of safety as just the only point. In fact, when you have great businesses available at throwaway price and then you have let us say valuation comfort. That is the time to buy. For me, the number one sector to avoid is IT and I don't want to be a brave-hearted trader to catch the falling knife and I will still let to go let clarity come in. I would rather buy higher than trying to catch a falling knife. So definitely no even here for IT.

[00:04:14]>> A lot of sense, Rudra. So still staying away from IT despite the kind of cut that we've seen not looking attractive right now on the charts as per Rudra.

[00:04:22]Rudra, also give us your picks. What's looking good this afternoon?

[00:04:26]>> So for me, NBCC is a very very strong chart pattern stock and I'm giving a big target stock available in future. One can look at initially targets of 135 and then 150 to come on NBCC. It has made a clear rounding bottom formation, has taken support at around 100 105 zone and now it is giving a clear breakout above 110. In a weak market also, this stock is outperforming supported by a lot of delivery volumes also. Open interest built up on the positive side. I'll be a buyer in NBCC. Initially 135 and then 150. Eventually even 180 200 is possible on NBCC. Keep a strict stop loss of 105 on a closing basis for the long trade.

[00:05:06]Second, I like Eternal a lot. This stock again having made enough of consolidation and a strong support zone at around 230 240 zone. Stock is now making an attempt to give a breakout above 260 and once it breaks the 260 zone, yes, can go ahead and look at 285 and even 300 as target. So I will be a buyer in Eternal at current market price. Keep a stop loss of 245 for this long call and you have to be very stock specific. Monday you will see a gap up open. Book some profits there. Next week by around Tuesday Wednesday, you will get a dip. Use that as a fresh entry opportunity on the long side. If you're already long and making this last 1,000 points move in Nifty. Time to book some gains today and some more on the gap up open on Monday. But fresh long position here definitely does not give you a good risk reward, but I'm not sounding bearish, but I'm only telling you to wait and buy on the dip rather than buying here.

[00:06:02]>> Buy on declines is the strategy for Eternal and the other stock that Rudra likes is NBCC. Rudra, on that note, thank you so much for your time and thanks for always being so clear with your calls. Really appreciate that.

[00:06:13]>> Thank you so much.

[00:06:13]>> Thank you so much. Viewers, on that note, time to slip into yet another very short break.