Even as benchmark indices are scaling new highs almost on a daily basis, Jay Anand Thakkar, CMT -Assistant Vice President - Equity Research, Anand Rathi Shares and Stock Brokers feels the probability of a breakout is quite high and the Nifty is likely to head towards 11,600-levels in this expiry itself.
Till 11,800 is not achieved the index may not see any major correction, he said in an interview to Moneycontrol's Sunil Shankar Matkar. Edited excerpt:
Market has been rangebound after recent correction. Do you think that tend will continue or break out on upside towards 11,500-11,600 levels?
Yes the probability of a breakout is quite high and the index is likely to head towards 11,600-levels in this expiry itself.
Will 11,500-11,600 levels be a top for Nifty followed by major correction or will it be able cross 12,000-mark (and by when)?
The minimum target of Nifty on the upside is 11,800 till those levels are not achieved we don't see any major correction.
Nifty has been trending higher in an upward sloping parallel channel and it is trading in the fifth wave up, so if the trend extends above 11,800 the index can touch the upper end of the channel as well — that is 12,400-levels.
Will the gap between midcap index and Nifty narrow soon or could it take some time? What is your view on midcaps?
The midcap and small cap index will continue to trend higher from the current levels as well with the Nifty and till the fifth wave of Nifty isn't over, the overall trend in mid and smallcaps remain positive.
Both of these indices have provided a clear breakout from the falling channel. The percentage returns for the calendar year, however, will not be higher than that of Nifty.
What is the chart telling you for Nifty Bank as it was the major driver for Nifty50 in recent rally?
Nifty bank, too, is trading well in its fifth wave and the breakout above 27,200-level clearly indicates that the trend is likely to remain positive going ahead as well in the short and medium term.
The minimum target on the upside comes to 30,200-levels whereas the channel target comes to 31,200-levels.
What is the India VIX chart telling about market trend?
India VIX is trading sideways and it is likely to trade within this range of 16-19 till the fifth wave on the index is not over i.e. till the meaningful top is not formed.
Currently, maximum Put addition seen at 11,000 indicating support and Call at 11,500 levels indicating resistance? What is your view?
Yes, before 11,000 there is a support at 11,200 as well and we think 11,200 levels won't be broken in this August series.
What are top 5 picks for short term (with small technical rationale)?
Buy L&T Finance Holdings with a target price at Rs 194 and stop loss at Rs 174.
Buy Raymond with a target price at Rs 845 and stop loss at Rs 760.
Buy Yes Bank with a target price at Rs 415 and stop loss at Rs 379.
Buy Aurobindo Pharma with a target price at Rs 694 and stop loss at Rs 634.
Buy Persistent Systems with a target price at Rs 939 and stop loss at Rs 847.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.