2 Top Stock Recommendations from Sudeep Shah

“So, while these two major indices are showing some kind of support, I think this 24,300, 24,400 zone acts as an important support for the Nifty,” says Sudeep Shah, SBI Securities.

Well, the screen is looking much better than it was the case yesterday. Are the toxins out of the system? Have we formed a bottom?
Sudeep Shah: I can’t really say whether the poison is out of the system or we have bottomed because this is the first day after the last three-four days where we have seen complete carnage in terms of midcaps and select largecaps. However, what is encouraging to see today is that yesterday and in the last few days we have seen some stability in banking, especially ICICI Bank, HDFC Bank and on the other hand, IT stocks are also seeing some positive trend.

So, while these two major indicators show some kind of support, I think this 24,300, 24,400 zone will act as an important support for Nifty.

But the important thing is that the indices have to cross now, the Nifty index has to cross 24,700 on the upside from a positional perspective to give us at least some sort of comfort that yes, the bottom formation is in place and we may see an upward move in the next few days.

Therefore, 24,700 on the upside will act as a key level from which we can expect a serious recovery. Till then, 24,350 to 24,700 will be the range in which we will see the indices oscillate and there can be extreme volatility even within this given range.

And anything on sectoral indices or nifty small cap, mid cap, bank index, anything that looks attractive or anything that looks like a strategic buy at the moment what is after the fall that we have seen?
Sudeep Shah: If you look at both these indices, be it Nifty Small Cap or Nifty Mid Cap, they are trading well off their previous week or last six-seven week swing lows. So, although from today’s lows, we have seen a thousand point recovery in terms of Nifty Mid Cap, but it is still early days and on the Nifty Mid Cap Index,
I believe 57,100, 57,000 will act as an important resistance above which we can see some great recovery in the mid cap counter.

Although this is just the initial first of this rebound, we should wait for today’s as well as tomorrow’s lows and crossing of 57,000, 57,100 and only then we can expect a serious recovery in both these indicators, be it Nifty Mid Cap. Or even Nifty Small Cap with one.

Any top recommendations that you might tell our viewers to keep an eye out for?
Sudeep Shah: Yes, there are some names that are on our radar and in these types of markets where the markets are continuously selling off or stock specific actions are happening very often, the stocks that we are keeping an eye on are the stocks that have not fallen last. Four-five days and vice versa, they have been very strong in gaining ground, so the first of these is MCX.

Now MCX, when the markets and midcaps as well as largecaps were collapsing, we have seen a serious correction move in MCX from the lows of 6400, 6350 in the last four-five days. Today, the stock is trading at an all-time high and is showing some serious outperformance. So, I feel from the current level, 6600 should act as a strong support, this can be bought with a stop loss at 6600 and targets on the upside can be close to 7000 and 7100. Another place where there is some strong action. In and within the IT midcap space I think Mphasis is now showing signs of breakout.

A downward sloping trend line breakout is seen here and momentum is very strong from the lower levels of the 2980-3000 zone today. So, I think this stock looks good on all parameters be it daily, weekly as well as monthly time frame and can be bought with stop loss of 3080 on downside and target of 3240 on upside.