Looking to invest in Adani Group? Ambuja Cements, Adani Ports long-term bets: Swapnil Shah

In an interview with ETMarkets, Shah said: “Markets would keenly watch the RBI interest rate decision scheduled on 8 February for further cues on the direction of the monetary policy” Edited excerpts:

It was an eventful week for Indian markets as we saw volatile Sensex and Nifty50 closing in the green. What led to the price action?
The relative outperformance of the Sensex vis-à-vis Nifty50 can majorly be attributed to the fact that

and Adani Ports form a part of the Nifty 50 while they are not the constituents of the Sensex index.

With both these stocks witnessing a massive sell-off in the week gone by, the outperformance in the benchmark indices is more to do with stock-specific action on a shorter time frame rather than any other anomaly.

How do you see markets moving in the coming week? Any key events that traders should watch out for?
With no respite in sight relating to the news flows related to the Adani group stocks, we expect markets to remain volatile next week as well, with limited downside risks as we feel that most of the negatives are already priced in.

Markets would keenly watch the RBI interest rate decision scheduled on 8 February for further cues on the direction of the monetary policy.With the central bank widely expected to halt interest rate hikes, comments from the RBI Governor would likely set the tone for markets.Additionally, comments from the US Fed Governor scheduled next week has the potential to sway market sentiment.After seeing a steep fall in about Rs 10 lakh crore in Adani group companies. How should one go about catching the falling knife? Which are the key parameters that one should track before investing in a falling stock?
The Hindenburg Research report has definitely soured the market mood towards Adani Group stocks in the foreseeable future.

With a lot of volatility in Adani stocks due to constant divergent news, it would be advisable for risk-averse investors to stay away from these stocks till the dust settles.

However, if an investor with a high-risk appetite is willing to take exposure to Adani Group stocks, it would be pr ud ennt to consider stability in cash flows and attractive valuations to arrive at the right stock.

We believe that Ambuja Cements and Adani Ports are worth considering at this point in time from a medium to long-term perspective.

FMCG, IT stocks saw buying interest in the week gone by. What led to the price action?
With the week gone by witnessing some wild swings due to the Adani fiasco, investors preferred to take shelter in defensives. The FMCG sector was largely supported by heavyweights,

and , due to the FY24 budget that focused on boosting consumption, especially in the rural areas.The IT sector also played its part and took cues from the decent performance of the Nasdaq Composite index.

Metal, oil & gas witnessed double-digit fall – what led to the price action?
We believe that market participants preferred to book gains in the metal and oil & gas space following the recent rally.Moreover, with the budget offering little respite to the oil & gas sector with respect to the provisions for losses of OMCs, markets seemed a little disappointed with the FY24 budget for the overall sector.

emerged as a top gainer in S&P 500 index (up 15% in a week). What is fuelling the rally and what should investors do?
Aegis Logistics, an oil, gas, and chemical logistics company, delivered strong gains for the week following robust quarterly financial performance.The company delivered a 72% annual rise in its revenues while profit grew around 23%, led by strong performance of the gas terminal division.Going forward, the ramp-up of the Kandla terminal and future capex plans are likely to be the key tailwinds for the business. We believe that investors with a medium to long-term outlook should continue to hold the stock in their portfolio.

What are your 3-4 trading ideas for the next 3-4 weeks?
Here are a few recommendations for the next 3-4 weeks:

: Buy | Target Rs 2,265 | Stop Loss Rs 2,000
The price action on the daily timeframe has been staged in a cup and handle schematic. It is currently hovering at pivotal support Rs 2,070.The major moving averages have a positive slope which indicates bullish biases, it is relatively outperforming the benchmark index of Nifty which dictates strength in the stock.The RSI is consolidating near the media and the MACD is trading in the positive territory.The price action has immediate support at 20 DEMA trading at Rs 2,074 levels and it is anticipated to attract further bullish momentum on sustenance above the same.

: Buy | Target Rs 1,125 | Stop Loss Rs 1,005
The price action on the daily time frame is trending in the direction of its prior bullish pattern breakout of the rounding bottom.It saw decent profit taking from the 52-week high level and the intermediate corrective trend resulted in the formation of a bullish reversal harmonic pattern of ABCD. It is now bolstered by pivotal support.
The pharma stock displays stronger relative performance as compared to the head index of Nifty the trending momentum shows strength by means of RSI scaling above 60 levels. Hence, we reiterate a bullish bias in the pharma stock.

: Sell | Target Rs 470 | Stop Loss Rs 585
The price action on Berger Paint continues to deteriorate whilst trading in stage 4 of corrective phase and is already trading below the 200-WEMA and 61.8%.The price action further plummeted below the crucial polarity trendline and pivotal support in the week gone by.The relative strength and performance as compared to Nifty is trading with a negative slope over the last 7 months which is not a good sign.The RSI too is trading with a lower high and lower low sequence since it peaked in January 2021 which indicates a dearth in the strength of the price momentum.

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