How to trade in rail stocks ahead of Budget? Here are pro tips from Anand James

economictimes.indiatimes.com:

Budget on February 1. RVNL and Texmaco Rail could surprise, says Anand James, Chief Market Strategist, Geojit Financial Services.

Edited excerpts:

Nifty ended over 1% lower in the week with heavyweight HDFC Bank leading the downside. The next week will be all about Budget and earnings. How are you placing your positions ahead of the Budget?

Unlock Leadership Excellence with a Range of CXO Courses

The last three days have seen rejection trades, with bears systematically upping their ante with every attempt to rise. However, dips never gained speed, and the prime reason for the same is the presence of the 50-day SMA nearby, which successfully allowed a regroup of bulls on Thursday. However, we have managed just 50% retracement of recent falls and there is not much to rejoice in terms of bullish confirmation. Yet, we hope to build on Thursday’s momentum and look for 21,500-560 initially, stop and reverse for 20,900. We would consider out-and-out bullish bias only on a close beyond 21,800.

The fate of Nifty Bank seems directly tied to HDFC Bank. Do you see more pain ahead in both?

Nifty Bank staged a solid recovery on Thursday, but as is the case with Nifty, it has not excited us. We prefer to go in next with a limited upside objective, but are willing to broaden our horizons, should we push above 45,420. Downside markers, until then, may be placed near 44,700.

How would you trade rail stocks in the run-up to the Budget session? Which ones can surprise?

Railway stocks have run up significantly with most of them moving more