Stock Recommendations: Top 2 Stock Recommendations from Vinay Rajani

“And right now, in today’s market also, I feel that if we go by the charts of both the large-cap and mid-cap segment in IT stocks, I think in the short term we can get a good boost in the IT sector as well,” he says. Vinay RajaniHDFC Securities.

It seems that the IT index is leading the gains today and has been for the past week, although we see that… Do we expect further gains as far as the IT index is concerned?
Vinay Rajani: Yes that’s how it is Skilled IT Index, the main trend of the index is quite good and it has witnessed some correction from the all-time high which was around 43,300 and from that level, it went down to 41,800.
And today, it has shown a nice reversal. And this is a continuation pattern. We can say that it is a breakout of the flag pattern on the daily chart.

And it has been finding support at its 20-day exponential moving average. Therefore, there was a breakout on the long-term charts in the month of June and after that, we witnessed some follow-through buying. After that, we also witnessed some correction.

And after this zigzag movement, the continuation of an upward trend is observed again. Therefore, I think that the IT index is on the rise and the main trend is quite bullish and one should buy on every dip.

And right now, in today’s trading also, I feel that if we look at the charts of both the large-cap and mid-cap segment of IT stocks, I feel that in the short term we can get a good momentum in the IT sector as well.

Yes, the bullish view should be there and yesterday’s low of 41,800 in the Nifty IT index is a strong support and I think it will not be broken and this is a short term low for the index. Yes, the largecap stocks that can be considered are Oracle Finance, LTIM mental treeThese are the large-cap stocks. And Firstsource SolutionFSL in the midcap segment can be considered for long-term trading.

And what is your view on the Nifty banking index? Well, I guess the banking index is finding it difficult to cross the 50-day moving average level. A few days ago, we also saw it testing the 100-day moving average.
Vinay Rajani: Yesterday, the Bank Nifty made a surprise move. If we go by last week’s data, we witnessed a small accumulation in the indices. On Friday, too, we witnessed a small accumulation in the index. But yesterday, a completely different move took place.

Yesterday, we witnessed short covering in Bank Nifty and after that, buying is taking place in today’s session as well. At the moment, though it is trading flat, there is no significant momentum and there is follow-through.

But the way it has turned around from yesterday’s low is quite compelling. And particularly these private sector banks are looking very good and have shown some signs of reversal on the short term charts.

Therefore, I think the momentum should be on the higher side. However, 51,700, which is the previous high, is the high that was recorded on September 3.

To be precise, that level is at 51,750 spot. So, Bank Nifty has that strong resistance. So, up to that level, there could be movement, there could be a recovery rally.

But once we see 51,750 being broken to the upside, then we can see a big move higher and that can also trigger an all-time high.

Therefore, I am keeping a close eye on this 51,750 level as a short-term resistance. Once we break above it, we can expect all-time highs in the coming weeks as well.

But what about? Consumer goods What is the index? Over the last three to four months, the index has performed well, with no zigzag movements. We are seeing a one-way momentum in the FMCG index, which is actually outperforming the other indices. What is your view on the FMCG index going forward? Do you think the outperformance will continue or will you take it a little easy now?
Vinay Rajani: So right now what is happening is that there is a nice sector rotation taking place and everyone is uncertain about the market trend because last week we saw some profits coming in.

Unless we emerge from these uncertainties, the defensive sector, such as FMCG, will continue to perform well.
Therefore, it is currently trading at its all-time high. It is clearly in an uptrend, so there is no doubt about it. We should not anticipate the high or take any contrary warnings for now.

So, the situation is looking good. And for the index, 64,000 is a very strong support, I am referring to the Nifty FMCG index. And many large-cap stocks in this particular sector are looking very strong, like Debur, Britannia, THEM.

In fact, HUL broke out of the long-term charts just a couple of weeks ago and that trend continues to this day.

So, I think the positional trend will remain bullish and there could certainly be some profit-taking or a correction, but the main trend is pretty good so short-term dips should be taken as a buying opportunity and I think I have a bullish view for the next few months, so to speak. So, FMCG looks even stronger.

So what are your top picks in this market scenario? Should I assume they are from the FMCG sector or the IT sector, or should you stay away from them and provide different insights to all our viewers?
Vinay Rajani: So, as I said, I am bullish on FMCG, so one can go long on one FMCG stock, which is Dabur.
Yesterday, Dabur made a fresh jump on the chart. It is trading at its all-time high and the momentum is quite strong.

So, considering the overall trend, the kind of moving averages and indicators we have been following, it looks quite strong and can participate in this rally.

In Dabur you can go long at 665, for day traders I would suggest a stop loss of 650. If you are a two or three day trader then 650 should be the stop loss and on the upside 695 would be the target.

Dabur is one of the stocks that I like in the FMCG sector. But Radico Khaitan which is a liquor company can be part, we can consider it only as a FMCG stock.

Radico Khaitan and other liquor companies are looking very strong on the charts. So, Radico Khaitan in 2035-2040 can be long, 1980 should be the trader’s stop loss and on the upside, I expect a 3% to 5% upside move which should be around 2140. So, Radico Khaitan and Dabur India I like from FMCG space.