Nifty is moving in a channel of 11,650-11,850 where it is likely to break out on the upside with a potential target of 12,500, said Amit Gupta of TradingBells
We are expecting that mid and smallcap will outperform once the elections are over as valuations are very attractive despite headline indices are at an all-time high, Amit Gupta, Co-Founder and CEO, TradingBells, said in an interview with Moneycontrol’s Kshitij Anand.
Q: Given price movement in March and April, can we hit 12,000 on Nifty in May?
A: We are in a similar kind of structure as was recorded in 2014 where the index had started to rally in February and witnessed stellar gain in March as well.
But, April was the month of consolidation with wild swings on both sides then a big upside swing was seen in May.
Technically, Nifty is moving in a channel of 11,650-11,850 where it is likely to break out on the upside with a potential target of 12,500.
Q: The broader market is still under pressure even as benchmark indices are trading near record highs. What are your views?
A: Broader market underperformance is generally not a good sign but the current rally is driven by foreign institutional investors (FIIs) that generally chase large-cap stocks.
Investors would try to avoid investing in small and midcap counters ahead of the election result due to the uncertainty as they are high beta assets.
However, we are expecting that mid and smallcap will outperform once the elections are over as valuations are very attractive despite headline indices are at an all-time high.
Q: Among the companies that have declared Q4 results, any particular stock that has displayed signs of a breakout or a breakdown?
A: Axis Bank gained mildly despite strong Q4 results but it is likely to rally in the coming days due to the strong uptrend where it bounced back from 50-DMA with bullish hammer candlestick pattern.
UltraTech Cement has already rallied with a strong breakout on the chart post robust Q4 results but there is still some upside potential left and any dips around Rs 4,500 would be a good buying opportunity.
SBI Life Insurance is another counter that is breaking out from a long consolidation and is likely to head towards Rs 700 in coming days.
Q: Do you think we have made an intermediate top in Nifty Bank?
A: Nifty Bank is the leader of the current bull market. After hitting new highs, it witnessed a decent correction. However, it is bouncing back from the critical support of 29,400 and there is a good chance that it will again get its leadership position back in May where it may witness huge rally once it crosses 30,700.
The Nifty PSE Index or CPSE ETF is forming a bullish flag formation and these could also do well ahead of the election result.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.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.