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Nifty to test 15,700 in coming months; ICICI Direct handpicks over 20 bargain buys across sectors

Markets buoyed by US Fed’s view that it would remain focused on getting people back to work as vaccines help the pandemic-hit economy recover.

February 25, 2021 / 09:56 AM IST
 
 
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Indian equities made healthy gains in morning trade on February 24 as positive global cues helped the Sensex rise more than 400 points while Nifty reclaimed 14,800, in light of positive global cues.


Market sentiment improved after the US Fed pushed back on inflation concerns and signalled the low-rate regime may continue for a longer time.


The US Federal Reserve Chairman Jerome Powell reiterated an accommodative policy stance in a speech before Congress and said that the central bank would move carefully and with a lot of advance warning before changing policy, according to a Reuters report.


Market participants and brokerage firms are positive on the Indian market and advise investors to buy quality stocks on every dip.


"We believe any dip from hereon should be capitalised on to accumulate quality stocks in a staggered manner as we do not expect the Nifty to breach the key support threshold of 14,300," said brokerage firm ICICI Direct in a note.


ICICI Direct expects Nifty to challenge the lifetime high of 15,432 and gradually head towards its revised target of 15,700 in the coming months.


ICICI Direct pointed out since May 2020, Nifty has not sustained below its 50-day Exponential Moving Average (EMA) which subsequently offered a fresh entry opportunity. Currently, the 50-day EMA is placed at 14,340.


"Price-wise, the index has not corrected for more than 8- 9 percent. In the current scenario, an 8 percent correction from life-time highs would be at 14,200. Time-wise, the secondary correction has not lasted for more than a week, since May 2020," ICICI Direct said.


The brokerage believes mid-caps will outperform wherein catch-up activity would be seen in small-cap stocks.


Bargain buys

ICICI Direct has picked 23 bargain buys, including  SBI Life, IndusInd Bank, HUL, Titan, Divis Laboratories and Sun Pharma, across sectors.

Bargain Buys_001

For Bank Nifty, ICICI Direct does not expect it to breach the crucial support area of 34,000 given the fact that the time-wise intermediate correction in Bank Nifty has not lasted for more than six to eight sessions since October 2020. Besides, price-wise correction in Nifty Bank has been in the magnitude of 8-10 percent, the brokerage added.


"In the current scenario, the index has already seen a decline of six sessions and has corrected by 7 percent. Hence we expect the index to maintain the same rhythm and buying demand to emerge around 345,00-34,000 levels," ICICI Direct said.


"On the higher side, we expect the index to retest its all-time high around 37,800 in the coming month," the brokerage added.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Nishant Kumar
first published: Feb 25, 2021 09:56 am

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