Infosys, SBI, Thermax among top 5 stocks to buy with 2-3 weeks horizon: Santosh Meena of Swastika Investmart

Santosh Meena, Head of Research, Swastika Investmart Ltd said that investors should start accumulating quality stocks amid prevailing pessimism in the market.

In an interview with Zeebiz's Kshitij Anand, Meena suggests a diversified approach with stocks from different sectors where Infosys from IT bank, SBI from banking space. Edited excerpts:

Q) Sensex, and Nifty50 closed with gains of over 2%. What led to the price action?

A) Markets were extremely oversold and there was selling exhaustion while some positive news on the Russia-Ukraine front, cool off in crude oil prices, the victory of BJP in four states led to a strong bounce back in the market.    

Q) What is your view on Nifty and Nifty Bank for a holiday-shortened week?

A) Technically, Nifty witnessed a smart pullback from the 16700 level and witnessed bullish engulfing candlestick formation on the weekly chart that is a positive sign; however, 16800-17000 is a critical supply zone, because it is a cluster of 20 and 200-DMA.

Bulls must take Nifty above the 17000 level to come back aggressively in the game otherwise there is risk that bears may again become active where 16300-16250 will be immediate and critical support zone then 16000-15500 will be the next support area.

Bank Nifty also witnessed a smart pullback however 35500/36000/36500 are important resistance levels and it should cross 36500 level for any meaningful reversal.

On the downside, 34000 is an immediate support level while 33000-32500 is the next support area.

Q) Sectors like telecom, IT, realty rose over 2% each while power stocks saw mild selling pressure. What led to the price action, and will the momentum continue?

A) IT sector did well because it is considered as a defensive sector amid an uncertain environment whereas it has a tailwind of rupee weakness.

Similarly, telecom is among the least affected sector by geopolitical tension and inflation therefore we are seeing money flow towards IT, Telecom, and Pharma names.

The realty sector is a high beta space therefore it rallied along with recovery in the market while the overall outlook is positive for the real estate sector amid short-term challenges.

Q) We have seen some stability in the market in the week gone by – time to buy or investors should wait it out if someone has a time horizon of 1-3 years?

A) I believe we are in a structural bull market that is likely to continue, and the big wealth can be created in the Indian market in the next 3-4 years however elevated commodity prices are the biggest worries in the near term.

Investors should start accumulating quality stocks amid pessimism in the market. IT sector may continue to do well while capital goods, infrastructure, housing, financials are our preferred sectors for the long term.

Q) The big Fed meeting is also due in the coming week – what are your expectations and how should investors prepare for the event?

A) This US Fed meeting is going to be very important amid the hyperinflation situation and it is expected that at least 25 basis points rate hike will be seen while the possibility of 50 basis points rate hike can't be ruled out.

We are going to see high volatility in the coming week therefore conservative traders may step aside until the market digests the event and get a clear direction while aggressive traders play on both sides by respecting important technical levels.

Q) The recent strike on telegram channels from SEBI is a welcome step. Any advice you would like to give to traders if they base their trading strategy on social media tips?

A) The biggest challenge nowadays is burgeoning telegram channels and social media platforms for stock tips, big M2M screenshots to trap the traders at a time when there is a sharp surge in new retail investors in the market.

Traders should not be allured by such tips and screenshots because the market is not a place to make easy money and there is no free lunch in the market.

Traders should take help from the research team of their broker or any other professional investment advisor/research analyst.

Q) Please suggest 3-5 stocks for the next 2-3 weeks horizon which are looking attractive post recent drop?

A) I will suggest a diversified approach with stocks from different sectors where Infosys from IT bank, SBI from banking space.

Thermax from capital good space, Balrampur Chini from commodity space, and Reliance Industries are our preferred bets for the next couple of weeks.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)