ETMarkets Smart Talk | Buy these 5 PSU stocks on dips, says Ajit Mishra of Religare Broking

Within the PSU pack, he says stocks like

, , Oil India, , and can be considered for buying on dips. Edited excerpts from a chat:

Nifty faced resistance around the 18,180 mark last week. Do you see the index being non-directional in the week ahead? What are the key levels to watch out for?
It’s been four weeks now that Nifty has been hovering within the range of 17750-18250 levels. It crossed the immediate hurdle of the short-term moving average i.e. 20 EMA in the passing week but couldn’t sustain.

We feel participants should maintain their focus on stock selection amid the prevailing consolidation phase in the index and wait for a decisive breakout on either side. Going ahead, the upcoming earnings announcement of index majors might provide the needed trigger. Besides, global cues, especially the performance of the US indices, will remain in focus.

PSU stocks were among the top gainers in the week, with the Nifty CPSE index rallying around 3.5%. Do you see momentum sustaining ahead?
The Nifty CPSE has been maintaining a positive tone after reclaiming its record high in April 2022. There could be some consolidation in the near term, but the positive tone is likely to continue.
Within the pack, stocks like Coal India, NHPC, Oil India, ONGC, and Power Grid can be considered for buying on dips.

IT stocks have been in momentum in the last few weeks. What is the outlook going ahead?
We’re seeing noticeable traction in the IT majors and select midcap IT counters, and the IT index is currently hovering around the crucial zone of the long-term moving average i.e. 200 EMA on the daily chart.

Indications are in favour of a steady rebound; however, we recommend maintaining a selective approach as participation is restricted. Apart from the domestic factors like earnings, the performance of the US tech-heavy index, Nasdaq, may continue to result in some volatility ahead. From a short to medium-term perspective, we like , and among the IT majors and Persistent and from the midcap IT basket.

was among the top losers in the BSE500 pack in the week. Do you see recovery led by bottom-fishing or more pain ahead?
Most new-age companies are facing tremendous pressure on every rebound and the majority are trading at their record low or closer to that mark. We strongly recommend avoiding any bottom-fishing in these stocks until we see some meaningful sign of reversals.

What would be your trading strategy ahead of the Budget?
Though we’ve seen consolidation in the benchmark, the market has been offering noticeable opportunities across sectors. We feel it’s prudent to focus on stocks showing relatively higher strength and utilize dips to accumulate them rather than focusing on the index for cues.

Which are the 3-4 stocks that would be on your radar for the week?

, M&M, ONGC, Persistent, and are some of the stocks that look firm on the chart and have the potential to do well amid the prevailing consolidation phase in the index. At the same time, stocks like , Indus Tower, Naukri, PVR, and Tata Consumer may continue to reel under pressure.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)