On the benchmark front, the Nifty is currently hovering within 11,900-12,300 zone and either side decisive break would trigger the next directional move.
Q. Donald Trump’s visit to India which is scheduled next week is already fuelling some volatility in the Defense-related stocks. Media reports suggest that India and the US are expected to sign a $2.6 billion deal to buy 24 Seahawk helicopters from American defence manufacturer Lockheed Martin Corp. Will defence-related stocks will be back in focus?A. The government’s increased focus on defence is a positive sign for stocks like HAL and Bharat Electronics. However, the mentioned stocks would benefit only if the government promotes ‘Make in India’ and/or partnership with foreign firms and focuses more on reducing its import dependency as India has the largest share of imports for arms.
Q. India Gold April futures hit a fresh record high in the week gone by. What are your targets for the yellow metal for 2020? And, what should new investors do now – wait for a dip or can opt for buying at current levels? From a portfolio perspective – what percentage should you keep in your overall portfolio?
A. Gold has been witnessing a strong run for the past year as concerns over a global economic slowdown and declining interest rates led the investors to turn risk-averse. And, now it is fear of the economic impact of COVID-19 which has led to safe-haven flows in gold.
Prices look largely positive for a long-term perspective and can target higher levels of around Rs 42,500/10 gm initially and once there is a breach of the said level, the metal looks poised to test Rs 45,000/10 gm from a year’s perspective.
However, from a short term perspective, prices are seen facing an immediate hurdle at $1,610-1,615 an ounce in international markets.
We expect some profit booking in the near term as there is a slowdown in the spread of COVID-19 virus and also as dollar index has surged to three-year highs, so it is advisable to wait for some declines and look for buying opportunities in a staggered manner at lower levels.
We advocate that an investor should allocate 5-15 percent of its portfolio for hedging purposes in gold depending on your risk appetite.
Q. Top three to five stocks which are good breakout buys at current levels and why?
A. Considering the current market scenario, we advise maintaining positions on both sides. And, rather focusing on the breakout, we recommend buying stocks on reaction.
Marico: Buy| LTP: Rs 306.20| Initiation range: 303-306| Target: Rs 325| Stop loss: Rs 296
Marico has witnessed correction for the lpst five months and currently hovering around the support zone of the long term moving average of 200-EMA on the weekly chart.
Indications are in the favor of marginal consolidation followed by steady rebound ahead. We advise accumulating fresh longs as per the given levels.
HDFC Asset Management Company: Buy| LTP: Rs 3,383.80| Initiation range: 3,360-3,370| Target: Rs 3,550| Stop loss: Rs 3,270
HDFC AMC is currently trading closer to the neckline (support) area of the consolidation range as it has retraced marginally after the breakout.
The chart pattern combined with the positioning of confirmation indicators is pointing towards fresh up move ahead. Traders should utilise this opportunity and create fresh longs in the mentioned range.
ACC: Sell February Futs| LTP: Rs 1,428.30| Initiation range: 1,434-1,438| Target: Rs 1,370| Stop loss: Rs 1,465
Mostly cement counters are trading with negative bias and ACC is no different. It has been seeing a gradual fall for the last eight months and currently trading below the major moving averages ribbon on the daily chart as well.
The chart formation is pointing towards the prevailing trend to continue. We advise initiating fresh shorts in the given range.
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