ETMarkets Smart Talk: Wipro shares may be in for another consolidation: Anand James

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Having fallen around 49% from its 52-week high, shares of IT major Wipro NSE -0.82 % could be in for yet another round of consolidation before the run-up begins, says Anand James, Chief Market Strategist at Geojit Financial Services NSE -0.10 %. He sees deeper support in the stock at Rs 282.

  1. Given Nifty’s trajectory, do you think the index will keep on hovering within the 17,000-17,300 range in the near term?

Clearly, a breakout is due, having traded in the vicinity of 200-day SMA for 13 days now. We are inclined to take a contrarian view in the week ahead, with the expectation of upsides that could see at least 17428, the recent peak. This surmise is supported by decline in volatility expectations as evidenced by the fall in VIX from 20 to 18. Incidentally, VIX also closed at the day’s low on Friday, despite Nifty erasing nearly a 1 percent from the day’s high.

  1. After good results, how are the charts looking like for TCS and Infosys.

Infy may require a consolidation before the next leg up, while TCS appears ready to push higher.

  1. Is it better to avoid Wipro?

On the face of it, a fresh break below the recent low, which has held since the latter of June, is a clear red signal. But, put in perspective, the stock has fallen almost double as other IT biggies like TCS or Infy, from the 2021 peak. This, along with current price of 377 being in the proximity of 68% fibo of the 2020-2021 run, there is a case of value buying. However, with price action yet to paint any reversal signs, we may be in for yet another consolidation before the run up begins. Deeper support is seen at 282.

  1. What’s putting realty stocks under pressure? Is it better to avoid them at this stage?

A seasonally dull quarter followed by prospects of higher interest rates have kept the sector under pressure for a while now. However, incentives from governments like Maharashtra, as well as reports of surge in housing sales in select cities, present a case of looking out for value buying in this beaten down sector.

  1. Which are the few 3-4 stocks that would be on your watchlist for this week?

FINPIPE (CMP:138)

View – Buy

Target – 145 – 150

SL – 132

A Morning Star is in half formation in the daily charts which is hinting at continuation of the reversal attempt. Also, the daily MACD forest has shown signs of exhaustion along with volume breakout. We expect this bounce back to see 145-150 levels. Place stoploss below 132 for longs.

SEQUENT (CMP:103)

View – Buy

Target – 108 – 112

SL – 98.5

An inside bar after a 3 day consecutive decline in daily charts is pointing towards a bounce back in the short term. We would play this reversal for a target of 108-112 with a stoploss placed below 98.5.

HAVELLS (CMP:1253)

View – Buy

Target – 1300

SL – 1227

An inside bar Doji in daily time frame is hinting at a bounce back soon. Further, this bullish assumption is supported by exhaustion seen in MACD and above average volume buildup. We expect this bounce back to see 1300 soon. Keep stoploss below 1227 for longs.

First published in The Economic Times

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