This week, look at the rally in the banking space. The PSU banks were the top sectoral gainer, up 6.8%. Nifty Bank is up 1-1.5%, the biggest weekly gainer in 12 weeks and the moves that have come in from Axis and SBI. Will banks really ride the rally going ahead?
Yes, definitely, overall, market structure is looking bullish and the way the broader market is behaving, we are optimistic on the up move of this market and we expect that this rally can extend further in the coming week also and possibly we can see a new all-time high also for the Nifty.
If we go with the rollover data, yes, there was subdued rollover action for Nifty as well as for the Bank Nifty if we compare with the last three-month average as well as with the six-month average.
The rollover action was low, that is why we are seeing Nifty and Bank Nifty in consolidation.
But overall stock-specific action is clearly there in the market. The sectors which have already shown the breakout in the recent past are continuously showing the buying interest.So, we believe that after some consolidation Nifty may attempt to give breakout above 22,500 and once this breakout happens on the closing basis, then yes, possible rally can extend towards 22,750 to 22,800 on the Nifty.So, buy-on-dips is the strategy for Nifty, your stop loss should be placed at around 22,300. Even for the Bank Nifty, for the current week, Bank Nifty has formed a doji kind of candlestick pattern.But overall, on the weekly chart, if we analyse the structure, Bank Nifty is moving in an up-sloping channel, which clearly shows that there is a sustained buying interest in the Bank Nifty.
And once Bank Nifty manages to cross above 48,500-48,600 zone, then possible rally can extend to 49,500 also for Bank Nifty. So, again, in the Bank Nifty also, buy-on-dip should be your strategy, keep your stop loss at 47,800 to hold your long position.
Yes, PSU Bank is looking very attractive. The way most of the PSU banks have performed in the current week, that clearly shows the stocks like SBI, Canara Bank, Bank of Baroda, Bank of India, these all stocks are looking very promising. These all stocks have managed to break out of the near-term structure and so, we can see a good amount of rally in PSU Bank in the coming week also.
The first session of the May series, we ended the day in the red. What does the rollover for April look like? How do you expect the May series to pan out going ahead?
Nifty and Bank Nifty rollover was below to the three-month, six-month averages. But if we look at the broader market rollover, that is in line with the previous month and that is showing that stock-specific rollover action was in line with the previous expiry. The rollover data is now suggesting that most of the sectors like oil and gas, infrastructure, real estate, power, metal, these all sectors have attracted the higher rollover compared to the previous month.
So, I think these sectors may exhibit a good amount of rally in the coming series. For May series, yes, we are projecting a range for the Nifty towards 22,100 to 23,000, that is the range we are expecting for May series on the Nifty and for Bank Nifty we are projecting a range towards 47,200 on the downside and on the higher side 49,600 for Bank Nifty with the positive bias. Like most of the stocks, most of the sectors have shown good traction in terms of rollover activity and the sectors which have already shown a breakout in the last couple of weeks are clearly in the bullish trajectory only and the broader market is also in the bullish direction. So, we expect May series may also continue in the upward direction and possibly we could see a new all-time high also in the May series itself.
The kind of move we saw from broader markets, midcap and smallcap both outperformed the benchmarks. What do you make out, which can be the stocks which can perform very well in the coming week also, the stocks that have made it to your radar?
I think metal is a space where one can focus at this juncture. Vedanta is looking very promising. This is the fourth consecutive week where stock is making higher high-low formation. The way stock has formed a long build-up on the derivative data, rollover action was around 95-96%.
So, we believe that Vedanta can continue further upside and we are positive on the stock. Positionally, our target is higher around 480 to 490, but from a trading perspective one can buy Vedanta for an upside target of 425 to 430, keep stop loss of around 390.
The second stock that we like is GMR Infra. Stock managed to break out of the last three-week consolidation range. Long build-up was there in data. Rollover action was around 96%. The kind of breakout which we are witnessing on the daily chart as well as on the weekly chart, we expect that GMR Infra can continue furthermore upside towards 96 to 98. One can buy GMR Airport with stop loss of 88.
And the third stock is from the cash segment, that is HUDCO. A very strong breakout of the last 12-week consolidation range. The way stock has broken out, we believe that now HUDCO may exhibit a good amount of rally in the coming week towards 245 to 250. HUDCO can be a buy with a stop loss of 220.