Chart Check: Trading strategies for rate sensitive stocks

The Reserve Bank of India will review the Monetary Policy this Friday. Should you buy rate sensitive stocks ahead of the review? Check out the trading strategies with Ravi Nathani, technical analyst, Nsetoday.com



Smartinvestor : The markets have started the holiday curtailed week on a firm note. Do you think it is a good time to use this rally to exit, especially given the uncertainity surrounding the what the RBI will do in the policy review on Friday?

Ravi Nathani : Yes, we did witness a sharp rally in short term, resulting very close to important resistance levels 5940 & 6040. As since last 5 months Nifty is patterned with lower tops & lower bottoms, whereas the trend is still the same, therefore best trading strategy would be sell on rise with a stoploss of 5940 (risky traders - near term) & 6040 (short term trading period).

Smartinvestor : How should one play the IT pack now, especially stocks like Hexaware, Tech Mahindra and HCL Tech?

Ravi Nathani : Near term trend is bullish, whereas strong support is expected around 81, close below this level would change its trend from bullish to bearish, as it is close to its support level. best trading strategy would be buy on dips with a strict stoploss of 81 & target / resistance expected would be 90. TechM trend is down whereas support is expected around 870, sell on rise would be the best strategy to trade. HCLTECH trend is down on charts, whereas as support is expected around 660.

Smartinvestor : How should traders / investors position themselves in the rate sensitive pack? Can you suggest strategies for the auto and banking pack?



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