The level of 14,100 seems to be a crucial and acting as a support, the weekly closing of Nifty above 14,300 is a positive sign and the next hurdle can be seen at 14,500, Gaurav Garg, Head Research, CapitalVia Global Research Limited said in an interview with Moneycontrol’s Kshitij Anand.
Edited excerpts:
Q) It was a volatile week for markets but both Sensex and Nifty managed to hit fresh record highs. What led to the price action?
A) The expediting transition of power to Joe Biden, the stimulus package announced along with Georgia senate elections have neutralized the COVID surge and new strain.
The month after the holiday season in Global markets are seen with increased Institutional participation also, all these factors seem to have aided the markets to reach new peaks.
Q) What are the important levels which one should watch out for in the coming week?
A) The level of 14100 seems to be a crucial level and acting as a support, the weekly closing of NIFTY above 14300 is a positive sign and the next hurdle can be seen at 14500.
Q) Small & Midcaps outperformed in the week gone by. What is supporting the broader market indices?
A) Indeed small and midcap stocks have fared better than the blue-chip stocks, broader market indices seem to be supported by the Auto & ancillary, Banking stocks, and Pharmaceutical sectors.
Q) What is your view on the December quarter earnings? Do you think the road to double-digit earnings will only broaden from here?
A) There is a lot of positivity regarding the December quarter earnings on the street, the past quarter has seen the start of economic recovery and with the near-complete restoration of normalcy in the economy Businesses are expected to bounce back.
The aspect of double-digit earnings is still gloomy as the blow of Pandemic was so hard that it seems quite early to expect such earnings, with the loosened economic policy and the restoring stability such expectations would be reasonable from the upcoming periods.
Q) FII flows seem to be losing momentum something which can be seen from the week gone by. Do you think the momentum seems to be fading?
A) FIIs have pumped huge amounts of money in the domestic markets and hence taking time to consolidate their positions and possibly go for profit booking.
The momentum seems to have slowed down but it looks far from over. The market seems to be at a new high and therefore their activity may resume after a decent consolidation or a healthy correction.
Q) Has the market texture changed from buy on dips to sell on rallies?
A) Indeed, the markets seem to be a sell on rallies as of now considering that a lot of profit booking can be seen in the market; however, looking at the day-to-day trend the markets still seem to have a lot of value in buying on dips.
Q) Your top 3-5 trading ideas for the next 3-4 weeks?
A) Here is a list of stocks for the next 3-4 weeks:
Hero MotoCorp: Buy| LTP: Rs 3159| buy above 3165| Stop Loss: Rs 3063| Target: Rs 3310| Upside 5%
The stock has given a consolidation breakout on the daily chart and managed to close above 3150, with the recent swing in the auto sector this seems to be a good pick.
Ajanta Pharma: Buy above 1835| LTP: Rs 1782| Stop Loss: Rs 1748| Target: Rs 1965| Upside 12%
The stock seems to be on a bullish rally and gave a breakout on the daily chart, the recent surge in the Pharma sector is expected to channel volume into this stock.
Maruti Suzuki: Buy above 8060| LTP: Rs 8015| Target: Rs 9575| Stop Loss: Rs 7640| Upside 19%
The stock has given breakout above the monthly level and the momentum in the automobile sector suggests an impending bullish rally.
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