Nifty has closed at a new all-time high in the week gone by, and it is also sustaining above the 20-day SMA. As long as it respects its support level of 12,800, it is likely to test its level of 13,200 this week, Gaurav Garg, Head of Research at CapitalVia Global Research Limited said in an interview with Moneycontrol’s Kshitij Anand.
Q) What a week for Indian markets. Nifty50 rallied over 13000 while the Sensex also made its headway towards 45000. What led to the price action on D-Street?
A) The Nifty has formed a Doji pattern on its weekly charts and made a high of 13,145.85 this week. The rally was majorly led by metal, banking, and financial stocks. Nifty Metal rallied 4.75 percent during the week.
Bank Nifty has tested its resistance level of 30,000 earlier in the week. However, the expiry of the November contract added some selling pressure which led to a healthy correction in the market.
Q) GDP Data was better than expectations for the September quarter. How will it impact market sentiment in the coming week on markets?
A) Though GDP is expected to improve compared to the previous quarter, the Indian economy's recovery is likely to be weaker than that of its global peers.
Broader markets have recently outperformed the benchmark index, reflecting a shift in demand to the mid & small-cap space.
The economy has to normalize and further stimulus has to be announced for the market to remain resilient which might take some more time depending on the government's strategy and vacation availability.
Q) Apart from GDP data another big factor that will impact D-Street is the RBI policy in the first week of December. What are your expectations?
A) Monetary policy of RBI generally has a profound impact on the street as it would determine the liquidity in the markets and also impact certain BFSI stocks that have heavy weightage in the benchmark indices.
RBI along with the Government has been taking comprehensive steps to stimulate and revive the ailing economy from the onslaught of the COVID 19 pandemic.
However, in our opinion, RBI has loosened the noose to a maximum extent and we expect the status quo to be maintained.
It will be quite sometime before the vaccine for the pandemic is out for the common public and curbing of COVID 19 therefore RBI may not bring back a contradictory regime for a couple of quarters.
Q) Based on November F&O expiry which are the important levels to watch in the coming week with respect to Nifty? Does it look like we could touch 13,200 – 13,500?
A) The Nifty has closed at a new all-time high. It is sustaining above the 20-day SMA. As long as it respects its support level of 12,800 it is likely to test its level of 13,200 this week.
If Nifty sustains above the level of 13,050 it might test its level of 13,500 as well. The support for Nifty is placed at 12,725 and 12,600.
Q) Your view on the broader market performance?
A) The Nifty Midcap and Smallcap have rallied 2.13 percent and 2.76 percent respectively. Abundant liquidity and healthy balance sheets are the key factors that are aiding the move towards midcap and smallcap stocks.
Fundamentally, strong stocks should be looked at in the midcap and smallcap space keeping in mind how they fare with the pandemic.
Q) Any 3-5 trading ideas for the next 3-4 weeks
A) Here is a list of trading ideas for the next 3-4 weeks:
L&T Technology Services: Buy above Rs 1751 |LTP: Rs 1724 | Target: Rs 1855 | Stop Loss: Rs 1670 | Upside 7%
This stock has given a trend line breakout in its daily charts and taking the support of the trend line. It has resistance placed at Rs 1750. Also, it is trading above its important moving averages.
Any breakout above the level of Rs 1750 would add further upward momentum to the stock. We recommend initiating buy position above Rs 1751 with a stop loss of Rs 1670 and a target of Rs 1855.
Dr Reddy's Laboratories: Buy above Rs 5020 | LTP: Rs 4829 | Target: Rs 5320 | Stop Loss: 4770 | Upside 10%
This stock has given a trend line breakout in its daily charts. It is in a consolidation phase. Also, it is trading above its important moving averages.
Any breakout above the level of Rs 5020 would add further upward momentum to the stock. We recommend initiating buy position above Rs 5020 with a stop loss of Rs 4770 and a target of Rs 5320.
HCL Technologies: Buy above Rs 858 | LTP: Rs 822 | Target: Rs 903 | Stop Loss: Rs 815 | Upside 10%
This stock has been in a consolidation phase for quite a few days. Any breakout about the level of Rs 858 would add further momentum to the stock. We recommend initiating a buy position above Rs 858 with a stop loss of Rs 815 and a target of Rs 903.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.