2 top stock recommendations from Laxmikant Shukla

Laxmikant Shukla: So, rightly pointed out by you that the market sentiment, what even we have observed over the past few sessions has been a mixed bag. While there were brief moments of positivity, the overall trend has shifted on the lower side.Even whatever rally we have got, that being met with a sell-off. Even if we look at the instance of the last two days, we tested the January low with some buying interest; however, this subsequent rise, we witnessed this subsequent rise quickly dissipated and indicating a lack of sustained momentum.

But on the lower side, the levels of 22,800 could act as the support areas for the Nifty and even in today’s session, we have seen a sharp recovery which is coming around 100 to 130 points.

So, we are expecting that the market will retain these levels and we could expect some more pullback moves. So, if Nifty able to hold the levels of 22,780 to 22,800, then it is going to form triple bottom pattern on the daily chart, so which is suggesting a trend reversal and we can get the confirmation of this triple bottom if it surpasses the levels of 23,400 levels which could potentially push Nifty towards the levels of 23,800.But on the flip side, if Nifty breaks the levels of 22,780, that would be the crucial support, then we could see further correction in our index towards the levels of 22,500. So, we should follow a level-based approach while trading in the index.

Laxmikant Shukla: So, looking at the structure in the index, as I said that if it able to close above the levels of 22,800, even on Monday basis if it able to defend these levels of 22,780 to 22,800, then after we could see some formation of triple bottom, so that could be the level from where we could see some sort of pullback move.And if it is able to break this level, then we could see some more deeper correction in the Nifty towards the levels of 22,500. And as you were talking about the FIIs, so FIIs have been selling heavily from the last two months heavily in both the indices, so I think that that would be continuing in the upcoming sessions also.

Even if we look at the FII long-short ratio, it is trending lower and it is still trading near the mark of 15.18% to 15.5%.

So, I do not think so that they will stop this selling and they will continue, but as per the technical parlance and if we talk about on a structural basis, that according to us that 22,780 would be the crucial level for the Nifty and on the flip side if it breaches this, then we could see some more correction in the Nifty towards the levels of 22,500.

Laxmikant Shukla: So, as the index is hovering near the crucial support level, so I have one buy and one short recommendation. First, I would like to talk about a long recommendation. So, I have seen Nifty financial services where we have seen some sort of positive momentum in the upcoming sessions, so Chola Finance is one of the stocks where we could see buying momentum in the upcoming sessions.

Two days back, it has formed bullish engulfing pattern on the daily chart and yesterday we had seen follow through buying momentum, but today’s correction, we have seen that Chola Finance could retest its breakout which occurred yesterday, so I think that current level would be the best level from where we could get a good risk and reward ratio, so one can buy Chola Finance from the current levels and could expect the upside move toward our target of 1,435 with the stop loss of 1,340. And the second stock which I would like to recommend for the sell side, is United Spirits Limited.

This stock has given a horizontal line breakdown and from the last four to five days this stock has been trending lower with the formation of lower tops and lower bottom and currently it is trading below its all key moving averages.

So, weakness would persist in this stock. Our expected target is coming around the levels of 1,285 and one has to keep the stop loss of 1,405 while taking a short position in United Spirits.