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Mid-term Sensex target at 13,200: JMMS
Gautam Shah at JM Morgan Stanley Financial Services has a medium-term target for Sensex at 13,200. He says that the Nifty could gain another 50-60 points from current levels, and adds that a target of 3,800 looks achievable.
Q: What would it mean if the Nifty did not make it to its all time high, and actually went on to form a lower top and reverse from here? Would it surprise you if the Nifty did not make it? What would it indicate then for the medium term?
A: It is basically ONGC , which is playing a major role if you compare the Sensex and the Nifty. So if ONGC were to do well in the next couple of weeks, obviously you will see the Nifty surpassing its recent high.
I think that the Nifty will surpass its recent high. But if it does not, then I guess clearly the picture would be a bit distorted, and therefore support levels would then come into play. 3660 on the Nifty would be an important support.
Q: In the short term what are you expecting to see- a lot of intraday volatility or do you think we might get swung about through every week of trading?
A: The fact that we have consolidated sideways in the last three trading sessions after rallying really well late last week and on Monday is actually a very positive sign. Clearly profit booking is being absorbed in a sideways manner. Yes, one will see volatility, not this week, maybe sometime next week beyond maybe the region of 13000-13200.
Q: In the near term where would you keep a stop loss as a Nifty trader, a level below which might tell you that this is not just consolidation, and the market might be showing you some signs of reversal?
A: Lot of technicians were talking of 3500-3600 being the range, and once we actually broke out from 3600 we saw a quick 120 Nifty point move. For a 3-4 week kind of a trader, 3600 would be a good stop loss.
I know it is 150 Nifty points away, but that is a good stop loss. But for a short-term trader, 3660, which is about 40 points away from the current levels, would be an excellent stop loss.
