HDFC Bank to release Q2 results today. Anand James shares his trading strategy

economictimes.indiatimes.com:

NEW DELHI: As investors remain worried over the impact of merger, HDFC Bank shares have been underperforming with an 8% drop in the last one month. Ahead of the release of its Q2 earnings today, Anand James, Chief Market Strategist at Geojit Financial Services, says the present set-up doesn't convince a sustainable recovery. “Towards this end, we eye the prospects of rejection trades emerging this week, unless there is a close above Rs 1575/1612,” he says. Edited excerpts:

Nifty saw some buying at lower levels last week. What would be your strategy going ahead as IT stocks are likely to see more downside pressure?
Barring Infosys, IT stocks like TCS, HCL Tech and Tech Mahindra, which together form 11% of Nifty, seems to have found a base around their respective rising trendline supports hinting a bounce back. Towards this end, we do not expect IT stocks to be slowing down Nifty, but banks might.

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Perhaps the solution to this conundrum lies with auto stocks which are looking positive especially Maruti, Tata Motors and M&M ahead of the festive season. Meanwhile, despite fully recovering from the deep downside gapped opening of Friday, the evening star candlestick pattern formed in the closing hours suggest that the 19800-840 barrier will need stronger surge or perhaps more time to be conquered.
We will begin the week requiring the Nifty to float above 19730 to show positive bias, but as maintained last week, prospects of a collapse are low, and we are probably slowly gearing up for a 20020 move.


Nifty PSU Bank index was one