In the last couple of days, we have seen that after gaining Peak 26,000, the market has retraced from that level. Today, we are closing in at around 26,100. What is your view when it comes to the benchmark?
Shivangi Sarda: We have seen that bulls have been in action from the last few sessions and we are making a new high every day from the last three consecutive days. Now, of course, we are holding well above 26,000 marks and bulls are in full action. The put call ratio has improved and is sustaining about 1.3 levels, which clearly indicates that put writers have made a very comfortable base here.
Even on the monthly expiry day, we are seeing that the put premiums are kind of crashing down from the morning. So, overall, bulls are quite comfortable even at these levels. So, buy on decline strategy to continue over here. Even the fall in India VIX has supported the ongoing up move. So, we are expecting 26,200 and then 26,350 marks on the index next and 25,900 will act as a crucial support here.
Now, Bank Nifty has been the main driver of the rally in the last two weeks and we have seen clear outperformance after a series of lacklustre moves, especially with heavyweights contributing to the entire move. We are expecting the up move to continue even in this rate-sensitive index and we are expecting 55,000 next on the cards for Bank Nifty with a support of 54,000 levels. So, even though yesterday we saw that the bulls were in full action in the last hour, even today after the positive opening, the follow-up is quite visible in both the indices. So, buy on decline to continue with stock specific action.
So, let us talk about the markets in more detail and sectors. What is your view in the metal sector because that particular sector has been in focus on the back of the stimulus blitz that was underway in China. On the back of that, commodities were benefiting. Metal counters continued to buzz in today’s trading session as well. What is your take on the metal space?
Shivangi Sarda: The buying interest from China has triggered the metal pack and the related stocks as well. Nalco was one stock that was showing early signs of positive bias over here. Even the other stocks like Tata Steel or JSW Steel, for that matter, are looking quite good. But definitely, Nalco is showing good signs of positive rollovers also coming in for this stock.
Now, the good part in the metal pack is that this time around, it is sustaining after the breakout and metal packs are usually very cyclical and sensitive. They fall more than they move. This time around, the move has been sustainable till now. And we are expecting the next swing to continue for the next week as well? Coming to Nalco, 210 is the next target I am looking at.
What about IT and the pharma space? We are going to kickstart with the earnings season. We will see a lot of them move on back of the earnings. But IT and pharma are touted to benefit going ahead. Also, we have impending US elections; the Federal Reserve rate cut also has come about. What is your take on these defensive plays? Are they looking attractive?
Shivangi Sarda: Absolutely. If I look at the entire IT pack, it is the heavyweights that are catching my attention. We have seen that even though there has been a lot of impact of the US elections in this sector, it is only the heavyweights that have moved, which clearly indicates the correlation between the US players and our market. I am looking at Infosys and even Wipro is looking nice. But the rest of the midcap stocks, like BSoft or Tech M are not showing any signs of reversal. So, we could be long on the heavyweights.
In banking space, what is looking more attractive – PSU banks or the private banks?
Shivangi Sarda: The entire rally can be attributed to the heavyweights. So my attention is on the heavyweight stocks. Most favourable counters are Axis Bank and ICICI Bank. Now, in PSU stocks, there is one problem. It usually moves around before the budget and this time we have seen that the budget was in June, so momentum was there till then and then they have seen some sort of a distribution from there – the entire CPSE pack, not just PSU banks.
So, there will be some sort of a tailwind in the PSU banks, but overall heavyweights is what one can look out for because clearly the strength is over there. I am looking at ICICI Bank for that matter and this stock is looking quite positive with good rollovers and of course it is better placed than the rest of the players as well and the next target that I am looking at is 1400 positionally for the October series.
Any other top picks for the day?
Shivangi Sarda: Yes, I am looking at the auto pack and Maruti has been the top gainer today and we are seeing that good buying is seen in this stock. Now, RSI is showing a positive divergence here and this stock has moved after a consolidation of the last five months. So, definitely, this up move is going to continue with a good long build-up in this entire series and we are seeing that stock is stably holding even after the morning gains.
This stock is something that we are looking at, and Rs 13,800 is the next target for Maruti with the support at Rs 13,000 levels.
The next pick is Trent. The entire retail space is looking quite positive ahead of festivity and this stock has a correlation of moving around. You can call it the seasonality of moving around the festival months. This stock in fact has been the performer of the year. It has moved more than 160% in this year so far and beautifully respecting its exponential moving averages both on daily and weekly frames and we have seen that after a long consolidation, the stock has started to move. This upmove is going to continue. The next targets are 8,100 and Rs 7630 would be an important support to watch out for.