Chartist Talks | Ashish Kyal bullish on Nifty IT, recommends top 5 Budget picks

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"The Nifty IT index has been forming higher highs and higher lows, keeping the overall tone positive. Crucial level to observe is 37,000. A breakthrough above this level can take prices higher towards the 39,000 levels," Ashish Kyal, CMT, founder and CEO of Waves Strategy Advisors, says in an interview to Moneycontrol.Overall tone for IT will remain bullish for months, he believes. And one can use dips to buy stocks from this sector, he advised.Kyal, with more than two decades of experience in capital markets, suggested five budget picks, including AIA Engineering, Fertilisers and Chemicals Travancore (FACT), and Strides Pharma. Excerpts from an interview with Moneycontrol:Do you think the rally is done in IRFC and Rail Vikas Nigam which were the top gainers in the current month?Both IRFC and RVNL has shown near-vertical rise but reversed sharply on January 23. These stocks are still overbought and further profit-booking is possible in these stocks after the Union Budget.Prices are already discounting positive outcome from the Budget session and can show dramatic reversals. So, one should now be cautious on these stocks as long as lifetime high levels remain protected.Also read: Stockology: Watch for divergence indicators in a volatile trading weekAre the charts telling you that the selling pressure is done in Zee Entertainment Enterprises and Polycab India?For ZEEL, after recent decision to call off the planned merger with Sony, Zee Entertainment Enterprises (ZEEL) experienced selling pressure and closed the last week with loss of 29.47 percent. The downtrend is evident on weekly chart. The formation of strong bearish candle and closing below its previous crucial support level of 175 is confirming the bearish bias.On the daily chart, after significant sell-off on Tuesday price is trading within the range since past two trading sessions which is Rs 171–157 levels. RSI (relative strength index) is trading near the 23 level, which is indicating that prices are in the oversold area, so a short-term pullback is possible but use that as an opportunity to sell.Also read: Market Action: Six IPOs to hit Dalal Street, 10 listings lined upIn short, ZEEL is bearish. A breach below Rs 157 can drag the prices lower towards the Rs 150 level with hurdles near Rs 185 on the upside.For Polycab India, after news of the Income Tax (I-T) department detected "unaccounted cash...

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