Bargain buying opportunity in HCL Tech shares after last week’s dip: Anand James

economictimes.indiatimes.com:

NEW DELHI: The deep cut in the last few days appears to have found bargain buying in HCL Tech, providing a window for upside reversal, says Anand James, Chief Market Strategist at Geojit Financial Services. “But, should it fail to float above Rs 1135, a new leg of downsides could unfold,” he said, adding that Infosys may continue to face pressure. Edited excerpts:Nifty bulls got fever at 20,000-mark. Do the charts indicate that the milestone is likely to be hit this week if IT stocks do not play spoilsport?Our favoured end point for last week’s move was 19850-950, and though there was a brief penetration above the upper range, momentum failed to sustain.

However Friday’s sharp turn lower has eased the prospects of a collapse especially with several micro supports close by, ready to step in. This encourages us to look for upsides early this week, aiming for 20,160, with expectations of banking stocks to throw in their weight, even if IT plays spoilsport. However, inability to float above 19680, would negate the upside views, exposing 19460.How should one trade Nifty Bank, which was the top outperformer in the week? Will it outpace Nifty again?Notably, Nifty PSU Bank Index saw better traction than BankNifty with all of the index constituents gaining close to 5% on an average.

Major gains were seen in SBI, Bankbaroda, Canbk, PNB and Unionbank which contributed around 80% to Nifty PSU Bank index. 77% of the banking stocks in the F & O segment have seen short covering this week. Nifty Bank was driven by gains in ICICIBank, SBIN and Kotakbank which together form around 44% of Nifty Bank Index.