Hemant Thukral, National Head-Derivative Desk at Aditya Birla Money told CNBC-TV18, "Within the largecaps, obviously the rally has to be first carried forward by Bank Nifty because that is an area where now I think consolidation has happened enough. You are seeing it is consolidating above 21,000; now Put writers are actually taking over the Call writers on that place, so, that is one sector which I feel should go up to 21,500."
"The other sector where I think the flare up is really happening is the capital goods space. That is a sector which has been a laggard and suddenly you are seeing Larsen & Toubro (L&T) and Bharat Heavy Electricals (BHEL), participating in the rallies now. In fact BHEL is looking very strong to go up to Rs 178-180 also. So, I think in capital goods, we can also see a catch up from there also. However, I think main focus should be kept on banks," he said.
"The only sector which I think where we have seen fresh shorts starting happening due to currency factor is IT. So, that is a small I would say blip on the Nifty. However, apart from that, banking and capital goods are looking very strong to us."
"We have selected two midcaps, both of them have started seeing some buying coming back. One is Amara Raja Batteries. Within this sector, Exide Industries was already doing good, but Amara Raja Batteries was clearly acting as a laggard. What we have seen yesterday is 7 percent fresh longs have been added up. Interesting was the way the stock now has crossed Rs 850 and started to move up. That was a major resistance the stock was seeing and now what we feel is that Rs 850 should act as a support and the immediate target looks to be Rs 895-900."
"The second stock is also a similar story, IRB Infrastructure. That stock was also not seeing buying coming back and was in a very tight range. Suddenly, it saw a flare up yesterday and crossed that Rs 235-240 momentum which was backed up by fresh long open interest to the tune of 6 percent. So, what we feel now is that Rs 237 should act as a support now which we will keep as a stop loss and the target should be around that Rs 255-253 range."
"So, both these midcaps have started rallying yesterday and we feel that follow up rallies should continue for next two to three trading sessions."