Interview | Nifty CPSE may see 12% returns in coming weeks while Auto index eyes 15,000, says this technical chartist

Q: Do you think the Nifty50 will find it difficult to get back above the 18,500 mark in the rest of the current month? What should be the trader's strategy now?

The broader market participation showcased the eagerness of the bulls to levitate the market amidst favourable conditions, as all the intra-week dips have augured well for the bulls. Also, the ease in the US inflation data has acted as a catalyst that has provided buoyancy in the overall equity space, and that certainly got reflected in the price action of the key indices.

From the technical aspect, the sustenance of Nifty at the higher band of the consolidation zone for most of the trading sessions indicates inherent strength. As far as levels are concerned, 18,200 is likely to cushion any short-term blip, while the sacrosanct support lies around the 18,100-18,000 zone in the comparable period.

On the flip side, 18,500 is very much in the vicinity and with ongoing momentum, it is strongly anticipated to get tested soon. At the same time, an authoritative breach beyond the same could trigger the next leg of rally in the upcoming weeks.

Going ahead, we remain sanguine with the current momentum and would advocate the traders to utilize the dips to add long positions in the index. Meanwhile, one needs to keep a close tab on the mentioned levels and continue with a buy-on-decline strategy.

Q: Bank Nifty also seems to be finding it tough to hit its record high. Will it be possible in the next couple of weeks?

The high beta index – Bank Nifty, has gained buying traction, which could provide a vital role in uplifting the overall sentiments of the market. In fact, the entire BFSI space has been the real charioteer in the recent rally.

With this week’s smart move, the Bank Nifty has registered its highest weekly close, surpassing the previous figure of 43,633. Looking at the ongoing momentum, we will not be surprised to see Bank Nifty surpass 44,000 to hit a fresh record high in the coming weeks.

Q: Rail Vikas Nigam is the biggest gainer in the current financial year. Do you still expect sharp rally in the stock towards Rs 150 level?

This counter has already seen a vertical rally in the last 6 odd weeks. Prices literally doubled from their mid-March levels and this week; we finally witnessed some profit booking in this stock. This price correction was very much on the cards and should be construed as a healthy development in the longer run.

From here on obviously the outlook continues to remain positive but it would be very unfair to expect a similar kind of thrust to rally towards the Rs 150 mark.

Q: What are your two stock picks for the next couple of weeks?

We like ‘Uno Minda’ from the midcap basket. This auto-ancillary stock (formerly known as ‘Minda Industries’) had a dream run in the entire calendar year 2021. The stock prices climbed as much as 4 times in such a short span. However, since then we have been witnessing a long consolidation in the counter.

Recently, stock prices cemented their position around Rs 430 and are now in the process of finding their mojo back. Early this week, we observed ‘200-SMA’ getting traversed convincingly and on Friday, the price-volume breakout was visible, which is most likely to end its slumber phase.

Based on the above evidence, we recommend buying for a trading target of Rs 596. The stop-loss can be placed at Rs 545.

‘Havells India’ is also looking promising. Taking a glance at the daily time frame chart, we can see prices lingering in a small range for quite some time now. Importantly, every tiny bit of attempt to surpass the sturdy wall of ‘200-SMA’ placed around Rs 1,220 was turned unsuccessful.

During the penultimate week, the stock prices displayed the first sign of strength after confirming a breakout from this resistance zone. This week, a small pullback towards the key moving average was bought into and finally, we witnessed a strong price-volume breakout during Friday’s session.

We recommend buying for a near-term target of Rs 1,355. The strict stop-loss needs to be placed at Rs 1,278.

Q: Do you expect the Nifty Auto index to hit 15,000 mark in next couple of months?

Auto has been among the major drivers along with the financial space in the recent run. We have seen a steep rise in Nifty Auto index since the beginning of April.

With this, it has already confirmed a breakout from 13,500 to clock fresh record highs. Considering the overall tailwinds for this space and the recent performance of all heavyweight counters, we expect the index to first head towards 14,500 and then a possibility towards a new milestone of 15,000 also cannot be ruled out in the coming months.

Q: What is your take on Nifty CPSE index?

This index has been a steady mover in 7-8 months. We can observe a series of higher highs higher lows on the daily time frame chart, indicating an uptrend in the counter. We expect the steady performance to continue in the coming weeks and the index may continue its northward trajectory in uncharted terrain to test 3,300 – 3,500 in the coming weeks.

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