During July, "we expect Nifty to resume with trending moves on the upside which should help the benchmark to surpass and sustain above 19,000 mark," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said in an interview to Moneycontrol.
He expects bank and financial services, oil and gas, metal and auto to join in the rally and contribute towards the up-move.
On the Bank Nifty, "we expect stocks like HDFC Bank, IndusInd Bank to lead the next leg up-move which shall help the index to outperform in July," says Gedia, who has over 12 years of experience in markets.
Edited excerpts from the conversation:
Do you expect Nifty sustain 19,000-mark in July?
The Nifty has risen 12.5 percent since the start of April, 2023. During June, the Nifty consolidated between 18,500 and 18,900, and in the process has formed a strong base for the next leg of up-move. During July, we expect the Nifty to resume with trending moves on the upside which should help it to surpass and sustain above 19,000 mark.
What are the sectors to focus on in July series?
During June, defensive sectors like healthcare and pharma were among outperformers and now we expect bank and financial services, oil and gas, metal and auto to join in the rally and contribute towards the up-move.
Do you see Bank Nifty outperforming others in July?
Bank Nifty has witnessed subdued price action majorly on the back of correction in the heavyweights like ICICI Bank, Kotak Mahindra Bank and SBI. However, the underperformance is unlikely to continue and we expect stocks like HDFC Bank, IndusInd Bank to lead the next leg up-move which shall help the Bank Nifty to outperform.
Do you expect IT stocks (other than large-caps) to outperform in coming weeks too?
The IT stocks like Persistent Systems, Coforge, LTIMindtree and Intellect Design Arena are some of the names among the midcap IT pack which are in an uptrend and likely to witness continuation of the uptrend.
Do you think the current consolidation in Nifty Auto will breakout on higher side and surpass the 15,000-mark in July itself?
During June, the Nifty Auto index consolidated in the range 14,500 – 14,900 and in the process has tested the support of the 20-day moving average (14,580) and witnessed buying interest indicating that the dips towards supports are being bought into which is a bullish sign.
During July, we expect the Auto index to resume with its up move and surpass the 15,000 mark. Among the Auto Index we expect Maruti Suzuki and M&M to lead the up-move.
Your take on the Nifty smallcap 100 index which is yet to take out its previous record high?
Nifty smallcap index has rallied over 25 percent within a span of three months. The momentum indicators are showing overbought readings and negative divergence which is a sign of loss of momentum.
So we can expect some consolidation in the broad markets however there the underline trend is positive and this consolidation is unlikely to result into a trend reversal.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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