Two fresh ideas for Monday morning trading: Kunal Bothra, LKP

In a chat with ET Now, Kunal Bothra, Head Advisory, LKP, says Idea an Auro Pharma are two new investment ideas. Edited excerpts



ET Now: Bank Nifty, Nifty both reasonably active, CNXIT too active, what index would you be trading, what do you think the Nifty does next week?

Kunal Bothra: Well Bank Nifty is the one which has been a surprise. If it had been for Bank Nifty on Friday as well the market structure or the Nifty outlook would have been completely different. I still think that Nifty and Bank Nifty could play a contrarian role in the first half of next as well.

For Nifty, there is a significant amount of resistance which is now closer to the 8600-8650 zone. So I would be a bit surprised if the markets would try and break that but in terms of Bank Nifty, there still seems to be some more momentum building up. I think we have seen good action happening in the private sectors names today so I think keeping that into perspective, I believe if there is any trade I would look out for probably going long on Bank Nifty and maybe trying to develop some shorts in the Nifty touches or comes in the range closer to 8600.

ET Now: HDFC Bank is just about 5 per cent away from becoming the second most valuable company. IndusInd Bank did not have a bad Friday, Yes Bank has been blazing the trail. Is there any private bank that catches your eye?

Kunal Bothra: I think IndusInd Bank and Kotak Bank are the two banks which still hold very good potential in terms of charts. I think post result, IndusInd Bank is shaping up pretty well. I think Rs 1130 is where the stock is finding some good pivot point. So I would be looking at IndusInd Bank and Kotak Bank which are showing strength in short term charts. So I think for Kotak, at least Rs 800-805 is what I will look at from a very short term perspective as a target.

ET Now: You had a short call on Excide on Friday, if I am not wrong?

Kunal Bothra: I had a short on Exide on Thursday and Friday.
Fresh two trades which I am recommending is a buy on Idea. I think the stock is showing pretty good strength on the short-term charts so I would look at Rs 116 as a target on Idea with a stop loss of Rs 107.

The second is a sell on Auro Pharma, I think on Friday, especially in the last half an hour or so we saw some weakness developing in a couple of pharma names like Aurobindo and Wockhardt Pharma. So I would expect Aurobindo to probably show some sort of negativity. I would look at 740 as a target and 775 as a stop loss.

ET Now: The Bank Nifty has shown tremendous strength this entire week. What is the right trading approach for the Nifty Bank for Monday morning?

Kunal Bothra: I think the approach should be to carry forward your longs. I think one key observation which I wanted to point out was if you look at the daily RSI for Bank Nifty I think it is almost touching the previous two points of around 7580 zone or RSI and that is where the Bank Nifty tried to show some good sort of momentum.
I think on Monday or probably the first half of next week, I would expect that Bank Nifty should open with a strong momentum but I think probably set the tone for at least for many of these private sector names as well as the PSU stocks which have been doing well, so particularly on Bank Nifty I would continue to hold long positions.