Religare says BHEL, Eicher Motors and GNFC among top stocks to watch, a break above 19500 may take Nifty towards 19850

By Ajit Mishra

Markets have been consolidating in a range but rotational buying across sectors is helping the index to maintain a positive tone. Among the key sectors, the majority are participating inline the benchmark move wherein pharma and realty were among the top performers in recent weeks. Interestingly, the broader indices have been continuing their outperformance and trading around their record highs.

We thus reiterate a positive view on markets but suggest focusing more on stock selection. While all sectors are witnessing rotational buying, we feel the contribution of banking would be critical for momentum else the rise could be gradual. Besides, one can selectively choose from the broader indices citing their prevailing performance.

Here are the key levels for both Nifty and the banking index along with a list of stocks that traders can consider for long and short trades, depending upon the market conditions.

Nifty (CMP: 19,443.55)

Nifty has been forming a base and is likely to maintain a positive tone until it breaks 19,200. However, we need a decisive breakout above 19,500 for the index to inch towards 19,850.

Bank Nifty (CMP: 43,891.25)

The banking index is also seeing recovery in line with the benchmark index and currently hovering around the resistance zone of medium term moving average i.e. 100 EMA on the daily chart around 44,000. A firm close above that hurdle could help the index to subside the underperformance and inch towards the 44,700-45,200 zone. In case of any dip, the 42.800-43,250 zone would cap the downside. The underperformance of the private banking majors is still a concern so maintain extra caution in stock selection.

Stocks to Watch

Bullish- BHEL, Eichermotor, GNFC, Granules, Hindalco, Hind Copper, MFSL, NTPC

Bearish- Biocon, Glenmark, IGL, UPL, Voltas, Wipro

(Ajit Mishra, SVP- Technical Research, Religare Broking. Views expressed are author’s own. Please consult your financial advisor before investing.)