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bank nifty There was a strong return and there was short covering for many different stocks. The biggest positive sign was that many large cap names like L&T managed to do really well. Going forward, what areas are you eyeing that could be the next movers in line?
I think in the past week we have seen phenomenal improvement in the indices and the breadth of the market. This week and especially the last two-three days were very crucial as the market managed to tick all the boxes and came back with strong sector strength.
Bank Nifty made a strong comeback and short covering was done for many individual stocks. The biggest positive sign was that many large cap names like L&T, ICICI Bank managed to do really well.
So looking at last week’s analysis it was a very strong week with a lot of positives.
Now the only comfort the market really wants is that the global market doesn’t disappoint especially the US markets. So if we see that some stability is coming back in that market that could be a double positive for our market sentiment.
So net-net I am extremely positive on the market, at least for the near term. The base has definitely increased from 15700 to 16000 on Nifty.
Oil still remains very volatile and the rupee also saw a week of volatility, although now certainly reserve Bank of India Has come up with its own measures which are really helping to strengthen the rupee to a great extent. But overall what kind of levels would you focus on for these two classes?
I believe the rupee should strengthen from the current levels. We are close to the top or final rally USD INR Jodi and I think it’s finally going to be over in the next four weeks.
Even for crude, what we’ve seen in the last three to four weeks is a very measured kind of price reduction. So initially there was a range of $120-$125 for crude oil prices for some time and that range shifted to $10 less, $110-$115.
We are now talking about a new range of $100 to $105. So I believe that crude will also eventually move significantly below the current levels and the market has started turning negative. So even if you see a slight trading pop in these stocks or these asset classes, it is not affecting the course of an uptrend in emerging markets or equity markets.
I think it is net-net positive unless there is a big spike or something like that which completely changes the whole world, then only we will see a change in the structure. Till then I expect rupee and crude to try to get into topping mode.
Which are the stocks that are on your radar and which sectors are looking good to you now?
There was heavy writing on Bank Nifty at 35000 Put which generally indicates that there are strong expectations from traders that it will turn 35000 points safe on Bank Nifty.
I have two buy calls coming in and am focusing more on large cap names as I expect the indices to move significantly beyond Friday’s close.
the first one is purchase
Because the stock is on the verge of a major breakout. It is trading above the 200-day moving average which confirms a breakout of swing resistances along with the 50-day moving average and more importantly, the momentum indicator has shown a trend for Sun Pharma on the short term chart. Breakout confirmed.
Hence I am expecting the stock to move up to around 900 levels and place a near term stop loss at Rs 835.
The second is buying on L&T. The stock delivered a late breakout compared to other peers, but still the stock closed at a new multi-week high after a major swing resistance at 1675.
Hence I would suggest a buy on it and expecting another 100 to 120 points move on the stock with a stop loss of Rs 1800 with a stop loss of Rs 1640 as a near term target.
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent whose views) economic times,
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