Help us with your take on the benchmark indices, quite a tight range for both the benchmark indices but in the second half do you believe that the bulls can once again get back in charge as well as what is your view overall?
Sudeep Shah: What we are seeing is that post 13 days of up move, the slight consolidation is visible and Nifty is just 20 points down, so nothing much to complain about after this stupendous up move in the last 12-13 sessions. Yesterday, we created a new high at about 25,300 but yes, if you see sectorally lot of rotation is happening. Now, today consumption names are once again picking up. We are seeing auto names moving up. So, I feel overall structure is quite constructive and we are bullish on the markets from here on also.
So, if we just have to come down to a number on Nifty, then yes 25,100 will now be that number that I will be watching out for on the downside as an important support and till this zone is held. Upside up to 25,430, 25,500 cannot be ruled out in the next few sessions.
What is your view when it comes to the Nifty IT index because that has been also gaining for the last few sessions continuously led by majors like HCL Tech. Do you expect some profit booking to come in when it comes to Nifty IT index see?
Sudeep Shah: If you see the Nifty IT index after a bigger move in the last say three to four weeks now, IT index has reached at its say important resistance level even if you see on a ratio chart when compared with Nifty. So, I feel from 43,200, 43,300 level yes, there could be some resistance on the way up but there are no signs of any profit booking or any negative momentum in any other midcap or the largecap space. So, overall I feel it might just go into a time-wise correction rather than a price-wise correction in the coming days.
Also, help us with your take on the FMCG counters because the whole sector is once again getting back in action and stocks like Nestle, HUL, Tata Consumers are doing well today and this whole sector has been doing pretty well apart from the fact that for the past couple of weeks that was seen to be taking a breather but any stock that stands out from this particular space for you?
Sudeep Shah: Yes, there are a couple of stocks now. Consumption names we have been seeing in the last two to three trading sessions have been doing quite well, but yes, today there is one stock which was consolidating and is showing signs of a breakout.
This stocks is Nestle and from a continuation pattern perspective we feel Tata Consumer is our top pick. So, out of all the FMCG names I feel the strongest on the medium to long term charts as well as where the price action now is showing some kind of an uptick it is Nestle as well as Tata Consumer and we are quite constructive on it and we feel like both these names could do well in the coming few weeks.
One stock here I would like to check with you and that is SBI Card. From 720 level, we have a smart up move coming in for the share prices, any targets on SBI Card here?
Sudeep Shah: I would not be able to comment on SBI Card being a group company from the same stable.
And on Nifty Bank index any levels that you would suggest?
Sudeep Shah: See, from a bank Nifty perspective if we see in the last 8 to 10 sessions there is a strong base formation that has happened closer to 51,000, 51,100 levels thereabouts and that is also the 20-day exponential moving average above which Bank Nifty is sustaining above in the last 8 to 10 sessions.
So, I feel it is just a matter of time when we see this Bank Nifty showing a sharp uptick on the upside and breakout out of this consolidating range and the upside levels that we are eyeing for in Bank Nifty is 51,900 and that could be the first level and post that 52,300.
Also, help us with your take on the auto space as well and specifically for the likes of the two-wheeler counters because we are seeing that after Ola Electric IPO there is a lot of excitement building in for the likes of Bajaj Auto, TVS and now even Hero MotoCorp catching up the rally. So, amongst these three, how would you go ahead and choose the counters, any particular preferences there?
Sudeep Shah: If you see the Nifty Auto index that was on a one way upside right from say April 2023 till almost July 2024 and then we saw some kind of a profit booking, but once again the index has recovered the lost grounds in the last several weeks.
And it is now almost just closer 1-1.5% away from its all-time highs. But even within this space if you see closely Bajaj Auto was a early mover. It outperformed initially but now slowly but steadily Hero MotoCorp also has picked up momentum and post last four-five weeks of sideways consolidation we are finally seeing an uptake and sign of outperformance from Hero Moto compared to Bajaj Auto.
So, if we have to compare both on a like to like basis, I feel from a chart perspective, Hero MotoCorp would give us some additional alpha on the upside and in last four sessions specifically this has also formed a higher top higher bottom pattern also.
So, overall, the medium to long term trend is positive. From a short-term perspective, it is breaking out of a consolidation, so I feel Hero Moto can be bought with a stop loss at 5580 and the upside targets could range between 5800 and 5850 on the upside.
Wanted to understand that since there is a lot of sector churning that we are witnessing but any sector that you would like to point out which can be a possible laggard as per you and which might not participate much in the rally and traders can just be a little cautious while getting their bets on that.
Sudeep Shah: If you see, the metal space, now this is one space where I am personally a bit disappointed on because generally if you see a falling dollar index it would mean a positive sentiment from a commodity perspective.
But despite the falling dollar index from 105 levels to 101 or sub-101 levels also for a brief time we have seen the selling pressure accelerate in the metal index.
So, this is one space where I feel one, trader should be a bit cautious when money is there to be made in the other spaces, consumption, IT, banking which could now outperform.
So, one place which I feel traders should be a bit away from or at least if they have their positions, they should consider appropriate hedging mechanism, that would be metal space.