Refreshing rally: Is it prudent to stay long?

160804 Investors following SBI. Share this News with them.

0

Like this story, share it with millions of investors on M3

Refreshing rally: Is it prudent to stay long?

The 30-share BSE Sensex closed at 18,257.12, up 208.27 points or 1.15% and the 50-share NSE rose 65 points or 1.2% to settle at 5,479.15. The broader indices gained 0.7-0.85%.

Post your opinion here

 

0

Tweet

Share on Tumblr

Excerpts from Closing Bell on CNBC-TV18 Watch the full show »

Equity benchmarks rallied sharply in last one hour of trade, led by buying in technology, private financial, metal, FMCG, PSU oil & gas and healthcare companies' shares. The Sensex gained more than 200 points for the first time since August 2, 2010. But the Nifty have still been in a range of 5400-5500 for fourth consecutive week.

The 30-share BSE Sensex closed at 18,257.12, up 208.27 points or 1.15% and the 50-share NSE rose 65 points or 1.2% to settle at 5,479.15. The broader indices gained 0.7-0.85%. The Nifty August futures ended at 12 points premium, as per provisional data.

Is it prudent to stay long?

Vijay Bhambwani, BSPLindia.com advices that it is better to hold on to long positions and as 5,500 plus looks possible on the cards.

"Traders would well watch the 5,400 on the Nifty  give or take 5-10 points here and there for levy way for emotional turbulence. But as long as 5,390 holds on closing basis I think the dice will still stick towards the bulls," he explains

On an optimistic note, even Ambareesh Baliga of Karvy Stock Broking thinks that Nifty is likely to cross 5500 and move towards 5600. Baliga says that there is extremely good support at lower levels of 5,350-5400 so slowly it will inch up but it is quite difficult for anyone to trade on Nifty.

"Even for a day like today it was quite difficult to trade on Nifty but it's more like stock specific markets and those specific stocks only move for couple of days, two-three days so one needs to move in, move out quite fast for e.g. State Bank of India was a good mover couple of days back but again today its fallen down," Baliga elaborates.

Sharing the same view, Sonam Udasi, Head Treasury, IDBI Capital says that there are far more positives than negatives at this juncture. So according to Udasi it should head higher from here.

"Our own feeling is that overall in the last few trading sessions whenever the market has been range bound and there is cries of that we may be headed further down. It has always rebounded. Our own sense is that there are far more positives than negatives at this juncture, risk appetite is back," Udasi reiterates.

Trading strategies

Baliga says that Tata Motors can possibly move to levels around Rs 1,100 but it is fundamentally quite expensive but they could be traders delight for a while.

According to Udasi, there is still more steam left in some of the PSU banks especially in Bank of Baroda and Punjab National Bank (PNB). This is because their net interest margins (NIM's) would start to look up in the coming quarters in an interested cycle which is hardening. Also their overall credit profile is becoming better but their deposit cost will go up with a lag.

Udasi is also positive on both Tata Motors and Hindalco . "Our view simply is that right now it will look good. The only concern is how the commodity cycle will pan out and if that takes a hit then of course there is a negative perception on Hindalco. But right now we are positive on the stock," Udasi adds.

Also watch the accompanying videos.