Akshay Bhagwat, Senior Vice-President of Derivatives Research at JM Financial Services, on Thursday shared his views on a select set of stocks, including ICICI Bank Ltd, Larsen & Toubro (L&T) Ltd, Ola Electric Mobility Ltd, Tata Motors Ltd, Bajaj Housing Finance Ltd, Bajaj Finance Ltd and Kotak Mahindra Bank.
"RBI policy outcome is due tomorrow. That would be a make-or-break moment for most banking names. The sector has been under severe pain for the last few months and a good recovery attempt is being made. For ICICI Bank, the price chart reading is strong and the expectation is that Rs 1,240 is the short-term support. The expected targets would be Rs 1,320," the market expert told Business Today.
Analysts largely expect a 25 basis-point rate cut from the Reserve Bank in the upcoming bi-monthly policy outcome, scheduled to be declared on February 7. If this happens, bank stock are poised behave positively.
For L&T, Bhagwat said Rs 3,200 is strong support for the stock. "We advise investors to hold it with a strict stop loss placed at below Rs 3,200 level. There could be a short-term pain in the counter," he stated.
In response to a query on Ola Electric, he said, "The stock is trading below its listing price and there is absence of demand currently. The reaction we are looking at currently doesn't give you comfort that this is a candidate from a long-term perspective. There could be more pain ahead and the stock might head lower. We suggest avoiding it as of now."
When asked about Tata Motors, the market specialist mentioned that the stock has fallen in the last six months. "It is currently trading in the oversold zone and there is a probability that favours a bounce-back rally in Tata Motors. Rs 680-700 is the estimated range where the stock might try to bottom out. If there is a recovery rally, we may see Rs 820-840 levels. From a long-term perspective, momentum is completely off. Investors can consider taking an exit on a rally around Rs 810. If you are open to averaging, this is the time to buy the stock for a recovery rally till Rs 810," he stated.
Bhagwat underscored that Bajaj Housing's price chart is weak. "The stock has been under pressure since its listing and there has been consistent selling. At present, the stock is trading in the oversold zone and there might be some support formation around Rs 100. Fresh buying is not advised and in case someone is holding it, they should consider exiting the counter," he further said.
The market expert shared his top two picks from the non-bank and banking segments as well which are Bajaj Finance and Kotak Bank. "Bajaj Finance's stock is looking a bit overbought. From a medium- to long-term perspective, we are looking at targets of Rs 9,500. Strong support could be seen at Rs 7,800. Rs 8,000 is the price point where investors can buy or average this stock," he suggested.
"Kotak Bank is on the verge of a positive price breakout. The expected target would be Rs 2,500 with a time horizon of a year," Bhagwat said.