Jet Airways top bet for Monday morning: Dr CK Narayan

In a chat with ET Now, Dr CK Narayan, Founder, Chart Advise, says tea shares have been going up of late and Mcleod Russel could be a good pick.

ET Now: Next week is expected to be volatile. How do you position yourself?

Dr CK Narayan: Volatile for sure but perhaps not on Monday. Monday will be a day similar to Friday and people will just wait for the policy and banking will remain in play along with a few other rate sensitives. We saw real estate ^[1] in play on Friday and we might see some action in auto, particularly two wheelers in expectation of some sort of dollops to be given out by the RBI Governor. The market is already in a rather high state of expect ation and there is possibility of disappointment. One hopes and trusts that the Governor shall not disappoint the markets. The way things are poised, if the governor is generous enough to give us about 50 bps or better rate cuts, the markets will be in a decent position to scramble upwards and shoot for 8000 levels. But that is something which remains to be seen. So the prudent thing to do would be to set some nearby stop losses on whatever position one is carrying. I would think stop loss at about 15800 on the Bank Nifty ^[2] and about 7625-7630 on the Nifty would be the nearest where I would play. On the upside, there is a lot of room and I would be happy to take positions post the event.

ET No w: Five or six stocks stood out amongst many. I know you have some picks anything like Adani Power or some sugar stocks ^[3] that caught your eye?

Dr CK Narayan: Sugar definitely catches the eye but from the power sector, Adani has moved up a bit. Reliance Power may be something to bet on and the chart patterns are clearer there. We may see some rally in Reliance Power too. Among the midcaps and the different set of sectors which moved, tea shares is another thing worthy of mention. Many of them perked up pretty well and they have a reason that tea prices have been looking up and you saw an across the board movement in most of the tea shares quite similar to but not the same q uantum as in sugar shares. Nevertheless, it was pretty broad based and you have a stock like Mcleod Russel which has now moved up. This stock used to be pretty much of a dog but has now moved up to near the levels of resistance and if there is a follow up movement in the next week, may be Mcleod could be one of the stocks in play and it would be a long time since it came back into play. So it could have lots of takers.

ET Now: Your top bets for Monday morning?

Dr CK Narayan: I would pick stocks which are on a bit of a recovery mode rather than chase something which has already moved in the last months. So within that space, I am looking at Jet Airways. Over the last three months, Jet has actually dropped by almost 40 per cent. It was Rs 800-805 and then dropped to sub Rs 500 levels. So at about 40 per cent decline, I do not think there is too much on the downside now and the stock is about to recover and has given off signals to that nat ure as of this week. If we look at a reasonable retracement of the fall, we would still get a target in price zone of about Rs 600-625 which leaves comfortable room from the current price of about Rs 570 for us to enter long and seek profit. We can keep a stop at about Rs 555 on such a trade. This is a swing trade targeting about Rs 600-625 as two targets.