The market has got it right. Given the kind of resilience we have witnessed, what do you think is in store for us?
I, for one, believe that prices themselves tell you which market sentiment actually gets reflected. So when you look at index movements as such, largely Nifty and Bank Nifty, the way the sectors are moving up, the way the sector churn has been happening time and again over the last broader 13-14 months, it has been moving into classical phases of a sectoral churn. So I think it tells you that this is not the short-term oriented rally or a rally that goes into those excesses, and goes through very sharp periods of corrections.
What the market showed in the month of February specifically was that even after going through a period of excess, it went through a time-wise correction to remain in a range for 3-4 months. And then it got back into the momentum where you have a lot of largecap names. In terms of short-term triggers, I think there are a lot of supports for Nifty50 with a lot of factors to watch out for.
One support for the Nifty50 index is at 15,400, I believe, which was approximately its previous high. That remains crucial and key support, and till the time we trade above that level, the net bias for the index has to be on the bullish side. One factor, which is a bit concerning from a short-term trading perspective, is the put-call ratio that is still at an elevated level of 1.6-1.61. So till the time we juggle around with these two key factors, I believe that largely, the short-term trend could be that the index could remain more or less in a range of 100-200 points. But the action would continue to be very, very stock specific, specifically on the largecap front.
What are the top names that you would bet on now? Which companies according to you have given an extremely strong closing?
So there are a lot of individual names I would look at. One of them from the NBFC pack is Bajaj Finance. LIC Housing was one of the top performers but then the solidity of the move is seen incrementally very strong on a stock like Bajaj Finance. So both Bajaj Finance and Bajaj Finserv look attractive but if I have to pick one stock from the sector, I would probably go with Bajaj Finance, expecting that it would get into a most steady uptrend over the next couple of weeks. A possible target range for the stock could be Rs 6,200-6,250.
From the auto pack, on Friday, we saw a very strong momentum coming back into names like
and . So that is going to be one pocket. Remember that Tata Motors has underperformed over the last 15-20 days compared to its peers. So I think there could be a good and strong catchup play into Tata Motors.
From the media pack, I think is something I have been bullish on for the last one to one-and-a-half week. The stock has come up quite strongly. It is heading towards a breakout of many triggers on the technical front.
Lastly, if I have to pick one stock from the PSU pack, I would look at something like
. I think the stock also looks quite strong even though it is a very, very low beta name, and tends to take a lot of time to give you even a 5-10 per cent kind of uptick. Over the next few weeks, I would expect a potential target of at least Rs 165-170 on the stock.
What will be your top picks for the next week. Any names that you would watch out for?
Watch out for two names specifically, purely on the back of momentum. I would suggest a ‘buy’ on Tata Motors. The stock is looking extremely strong as we discussed earlier. It came back to the thick of the momentum in the second half of Friday’s trading session. I would expect strong follow-through price action on Tata Motors. I would suggest a positional target of Rs 360 with a stop loss at Rs 325.
looked extremely strong till 2-3 months ago. It went through a correction after the results, but is now making a dash again. On Friday, for example, it managed to close back above its 50-day moving average for the first time I think in the last many weeks. This could be a sign of a strong trend reversal for Tata Chemicals. I would suggest a ‘buy’ for a target of approximately Rs 800 with a stop loss at Rs 720.