2 best stock recommendations from CA Rudramurthy BV for the short term

Indian shares showed remarkable resilience on Friday, with the Nifty nearing the 26,100 mark. Despite global markets, especially the US, showing weakness, domestic indices have managed to hold their ground, sparking optimism among investors. CA Rudramurthy BV, MD, Vachana Investments while commenting on the performance of the market, he pointed out that, “First of all, we have to understand that Nifty has already touched all-time high yesterday on a closing basis and Bank Nifty is touching all-time high on a continuous basis. Yes, on an intraday basis and at the all-time high level we might not have done it yesterday, but on an almost close basis when you see that Nifty decisively touched that all-time high yesterday.”

However, he emphasized caution and noted a divergence between the major indices and the broader market. “Look at the broader market, look at the F&O stocks other than the Nifty and Bank Nifty index, they are all hurting. Many of them are asking the question, even though the market is at an all-time high when it comes to Nifty or Bank Nifty, in terms of stocks you certainly don’t see that. And yes, very very important point, if you saw yesterday that Nasdaq S&P both closed below their 50-day moving average, which is not a good sign.”

Rudramurthy suggested that investors, especially short-term traders, take a defensive approach. “For me, it’s a time to at least wait, at least be on the sidelines. If you’re a very short-term trader, lower your leverage and just wait for opportunities because what Nifty and Bank Nifty are showing and what’s in the reality of most of their portfolio are two different things. So when it comes to the overall market, I’ll still be defensive. Look at stocks that are relatively defensive. Reduce leverage in your positions. And yes, Nifty might be well at all time high. Bank Nifty may be at all time high but the portfolios are not showing that. So my view is to stay on the sidelines, reduce debt, stay in defensive sectors and stocks and not increase debt now, and not be in high beta stocks now, and it is time to protect your capital right now.

When asked about stock-specific opportunities in the defensive sector, Rudramurthy highlighted ITC and IndusInd Bank. “One of those stocks, and at the current valuation and on charts that looks very attractive to me, is ITC. So ITC has built a very strong base for me around Rs 400. Now at the current market price it is a good buy, a relatively very strong stock. Technically it is also seeing accumulation patterns. So you can definitely have ITC in portfolio. Buy at the current market price. I am looking at the initial trading target of 435 and then 450. Stocks are available in portfolio. futures. You can definitely go long.

For private banks, Rudramurthy picked IndusInd Bank, noting its technical strength. “This stock has made a clear break above levels around 825 and is now consolidating. After moving to levels closer to that 880, some gains have now been made. So at the current market price this is a very relatively strong private banks stock which is also a strong sector. Buy IndusInd Bank available in futures, current market price and on dips to levels closer to 835, 830. I will be a buyer and a strict stop loss of Holding 825 and looking at initial targets of 875 and 900 on IndusInd Bank. So, a buy on ITC and on IndusInd Bank. With Nifty hovering near record highs, investors seem to be torn between riding the momentum and exercising caution, with experts calling for a focus on defensive sectors and disciplined trading strategies.