Ajanta Pharma, Bharti Airtel could be good buys for Monday morning: Mitesh Thacker

In a chat with ET Now, Mitesh Thacker, Technical Analyst, miteshthacker.com, says only above 7100, would you look at a slightly stronger reversal

ET Now: A bad week, little bit of a strength if you will in Friday’s session for the Indian markets. It is very difficult to say what will happen next week.

Mitesh Thacker: Yes. We have been able to trade on the downside. Now we are in a situation which is extremely oversold and possibly liable for a reversal. I think one has to be a very level specific trader in the days to come by. I think any rallies beyond 7000 could see the pullback, possibly taking place led by short covering to about levels of 7080-7100. I am not sure whether we will go beyond that and only above 7100, would you look at a slightly stronger reversal.

ET Now: Pick some stocks from the broader end of the spectrum, -- be it LIC Housing Finance, be it Jubilant or Wockhardt, -- anything which has fallen a lot but looks like it will fall more?

Mitesh Thacker: Look at a stock like LIC Housing. If you look at the historical chart, sometime in June 2015, the stock had a weekly closing of about Rs 399-400 levels. I think that is a very important swing support area. This week, we have managed to bounce back from those levels. The intra week low on Friday or Thursday was Rs 393 but the pattern is quite negative. Eventually, it will definitely break below Rs 399-400 and once we get a weekly closing or daily closing below Rs 390, there is a good chance that the stock can possibly head towards levels of Rs 360 or thereabouts. Similarly, a Wockhardt Pharma, where the damage has been extensive, there is no sign of reversal as yet. So maybe on a bounce-back, I would look to even short Wockhardt Pharma. I am not sure whether it will make a new low, whether it will go retest the lows but I think this is not the pattern which suggests that a bottom has been made.

ET Now: What would the top trading ideas be for Monday morning?

Mitesh Thacker: Assuming nothing goes wrong, one stock which I like is Ajanta Pharma. It has managed to hold out nicely in the decline. If it breaks above 1325, that will be a swing breakout. Buy then with a stop at Rs 1300, for targets of Rs 1375 and on any dips. Bharti would be a good buy, buy with a stop at 322, for short term targets of 335.