10 rate-sensitive stocks to watch ahead of RBI policy
Investors will remain cautious ahead of RBI’s mid-quarter monetary policy. The decision on key policy rates is likely to set the trend for the market this week.
Investors will remain cautious ahead of the Reserve Bank of India’s mid-quarter monetary policy on March 19, Tuesday. The decision on key policy rates by the RBI is likely to set the trend for the market this week.
On the global front, the Federal Open Market Committee (FOMC) will hold a two-day meeting on the interest rates in the United States on March 19 and 20, 2013.
Last week banking stocks came under pressure on fears that the RBI may not cut interest rates at its mid-quarter review, amid rising retail inflation.
The foreign institutional investors (FIIs) were the net buyers of the Indian stocks worth Rs 2663 crore during the week till March 14, 2013, while the domestic investors were the net sellers of Indian stocks to the tune of Rs490.3 crore till March 14, 2013, said a Sharekhan report.
The Nifty had rallied from a low of 5663 made on 4th March 2013 to a high of 5971 on 11th March 2013 last week. The stock has thereafter remained in the range of 5790-5950 in the last few trading sessions.
“We expect the Nifty to remain in the range of 5790-6030 in the coming week. The support levels on the downside are 5850 and 5790 while the resistance levels are 5910, 5970 and 6030,” said Vinit Pagaria, VP - Investment Strategies at Microsec Capital Ltd.
“The intra-day volatility has risen sharply in the last few trading sessions and is likely to remain high in the short term. The markets are likely to follow global cues,” he added.
Pagaria is of the view that a fall up to 11400 on the BankNifty can be used to initiate long positions with a stop loss below 11100 and a target of 12000 in the medium term.
We have compiled a list of ten rate sensitive stocks which are likely to be in focus this week ahead of the RBI policy review:
Vinit Pagaria, VP - Investment Strategies at Microsec Capital Ltd.
1. M&M (CMP: Rs 927.75 SL: 890 Tgt1: 945 Tgt2: 970)
Mahindra & Mahindra Ltd is moving up after a strong base formation in the Rs 870-905 range. The stock is likely to move higher up to Rs 945 and Rs 970 in the next couple of weeks.
2. State Bank of India (CMP: Rs 2262 SL: 2190 Tgt1: 2330 Tgt2: 2390 )
State Bank of India (SBI) has rallied by over 10 per cent in the previous couple of weeks and is still looking strong. A move above the immediate resistance at Rs 2290 can take the stock higher up to Rs 2330 and Rs 2390 in the short term.
The momentum indicators are suggesting a positive bias and the RBI policy could act as a catalyst for the stock to move higher.
3. DLF (CMP: 272.50 SL: 290 Tgt1: 260 Tgt2: 245)
DLF has run up considerably in the last 2-3 months and a short term correction is on the cards. The stock fell sharply on Friday, 15th March 2013 and is likely to remain under pressure in the next few trading sessions.
4. Indiabulls Real Estate (CMP: 60.65 SL: 66 Tgt1: 56 Tgt2: 53)
Indiabulls Real Estate is in a downtrend since one month and has corrected from around Rs 80 odd level. The selling pressure is likely to continue in the short term and a breach below 56 is likely to take the stock further lower in the coming days.
5. Bajaj Auto (CMP: 1850 SL: 1800 Tgt1: 1905 Tgt2: 1950)
Bajaj Auto has corrected form Rs 2020 odd level to Rs 1850 in the last few trading sessions and is now near the support level of Rs 1820. A recovery from here could lead to an upmove to Rs 1950 in the next couple of weeks.
6. ICICI Bank Ltd: ‘SELL’ with a target of Rs 964
After breaking down from a medium-term rising channel, the stock has retested the channel line and has started falling down. The stock has fallen below its key daily moving averages and one can sell the stock at CMP with a stop loss of Rs 1117 for the target of Rs 1067.50 in the short term.
7. Reliance Infrastructure: SELL with a target of Rs 380
After a sharp fall in the stock, it is trading sideways since the last couple of weeks. The stock has also formed a bearish triangular pattern and is ready for the next move down. One can sell the stock at CMP of Rs 420 with a stop loss of Rs 440 for the target of Rs 380 in the short term.
8. Tata Motors: SELL with a target of Rs 260
The global auto giant has formed a running triangle, which is a bearish pattern in this particular case. Daily as well as weekly momentum indicators are in bearish mode and one can sell the stock at CMP of Rs 291.10 with a stop loss of Rs 308 for the target of Rs 260 in the short term.
9. Indiabulls Real Estate Ltd: SELL with a target of Rs 51
The stock is forming a ‘Head & Shoulders’ pattern, which is a bearish pattern. The right shoulder faced resistance near key daily moving averages. One can sell at CMP of Rs 60.65 with a stop loss of Rs 65 for the target of Rs 51 in the short term.
10. Yes Bank: SELL with a target of Rs 440
The stock is falling in a channelised manner. It recently faced resistance near the upper channel line and has started falling down. In terms of wave structure the stock is forming extension on the downside. One can sell at CMP of Rs 473.70 with a stop loss of Rs 491 for the target of Rs 440 in the short term.
(The views and recommendations expressed in this section are the analysts’ own and do not represent those of EconomicTimes.com)