3 stock ideas from Kunal Bothra for next week

We ended the week on a bit of positive momentum despite the entire news flow. We have entered a fresh month, a fresh expiry, will there be fresh cues that will take the markets higher?
Absolutely. I will probably categorise this week into two parts — there were a lot of qualities which were visible for the markets; our markets were much more resilient give what was thrown at us in terms of global cues, crude coming back towards 118 dollars per barrel, dollar index above the 105 mark, sharp selling across the US equities. We were broadly into this range of 15,700 to 16,000 for a good part of this week.

On Friday, after that first one hour of selling, the markets made a very strong comeback. So net-net, it was a good week for the markets on an ending basis. We are coming back above the 15,600 mark on the index which is again a very strong signal. My expectation going for the next week is that the markets can probably come back towards the 16,000 mark if not above.

Auto stocks have been a favourite for the last three-four weeks now. M&M has been moving higher, already had a good start to the year and is almost up 30% for the year. But in the last few days, prices were a bit tempered. Do you see some sort of brakes for the auto sector or do you think they will continue to be in the fifth gear?
I think the acceleration should continue for auto stocks. When the market finds or identifies a leader of a new trend or of a new rally, it gets a lot of premium. So, if you look at the last five-six days of charts, it is not as if the auto stocks have started to rally from this week itself but then the price action this week indicates that right from the first day of the week to the end of the week, the stocks went into a bit of a pause. But then at the end of it, you have the likes of M&M, TVS Motors, Hero MotorCorp making a strong comeback for themselves. So that gels quite well from the overall market theme. This is a multi-month, multi-year rally for these auto names.

Next week we have the IT major coming up with the numbers and this was the second consecutive week IT index managed to close in the green. What kind of data do you see building up right there? Now that the rupee is weakening, that is somewhat favourable for all these companies but they have other challenges to face; what is your take?
The rupee tailwind is not helping IT stocks at least when you look at the majority of the price-performance so far this week compared with the last two weeks. Rupee deceleration has not had a positive correlation with most of these IT stocks. But even within the IT pack, there is one stock which is of course leading the charge again and that is Infosys. The stock has clearly shown some very good bottoming-out signs. Rs 1400 has been very good support for Infosys. It tried to test those levels twice and it has managed to bounce back strongly from those levels, which means that this Rs 1400 mark should be a durable base for

at least over the medium to longer term. The risk-reward at current levels is very attractive for IT stocks. Traders can buy purely from a positional play.

Among your top bets for the coming week, will Infosys be there?
Yes, Infosys is one of them. Infosys should be good for at least another Rs 25-30 on the upside over the very near term. Traders could look at a target of Rs 1,520 approximately and stop loss at Rs 1460. The two other calls which I would probably want to focus on are and . Federal Bank stock has made a very good comeback. It is above the 200-DMA for the first time over the last so many months. That should also be a buy, with Rs 98 as an immediate target and stop loss at R s92. And from the auto pack, Hero MotorCorp is where I would believe the next charts could probably come back on the upside. So, that is a buy with a target of almost Rs 2,850 and a stop loss at Rs 2,700.

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