Technically, Nifty should eventually hit the levels of 12,600 in next few months.
GDP numbers and inflation numbers are not in the favour of small and medium size of companies. Only largecap companies can cope up with current situation and that's the reason expert investors are trying to stay away from investing heavily into small and midcap companies, said Shrikant Chouhan, Senior Vice-President, Equity Technical Research, Kotak Securities in an interview to Moneycontrol's Sunil Shankar Matkar.
Q: What are you expectations from the January series after the market made a historic high in December series? Will it be another strong series for market?
Expiry of the January month should also be on the higher side, primarily in the expectations of positive announcements from the Union Budget, which is scheduled on 1st of February 2020. Also, quarterly results from big corporates and companies should help the market to move higher. In fact, the month of February would be more interesting as compared to January. Technically, Nifty should eventually hit the levels of 12,600 in next few months.
Q: Bank Nifty also touched a record high. Will the index held 32,000 levels in January series?
Yes, it should hold above the level of 32,000. The reason is because the major components of the Bank Nifty are doing well since the last many quarters and could deliver a decent Q3 results in the month of January 2020. It could lift the bullish sentiment for Bank Nifty.
Q: What are top three sectors to look at in 2020 and why?
We are optimistic about Metals, Infrastructure and Auto. The reason is because technically, these indices are forming reversal formation on long term charts and fundamentally, we feel, global and domestic flows should turn positive to boost the economy.
Q: Despite recovery in last three months, Midcap and Smallcap indices are headed towards weak close for the year. What do you expect in 2020?
The market participants are still nervous as macro factors are still worrisome. GDP numbers and inflation numbers are not in the favour of small and medium size of companies. Only largecap companies can cope up with current situation and that's the reason expert investors are trying to stay away from investing heavily into small and midcap companies. Buyers are stock specific and not broad based. Midcap stocks should do well in the second half of 2020.
Q: What are your top five bets for 2020?
Balkrishna Industries: Buy | Stop loss: Rs 900 | Target: Rs 1,100
The stock is forming a rounding bottom formation on weekly charts, neckline for which is at Rs 1,030. Also, stock has witnessed a sharp reversal on monthly timeframe from its key retracement support zone of 700, which has bullish implications.
Hindustan Unilever: Buy | Stop loss: Rs 1,860 | Target: Rs 2,100
Nifty FMCG index has fallen from its recent highs of 32,600 and is now available at breakout zone, which offers favorable risk-reward ratio. HUL has been a significant outperformer in the FMCG basket and exhibits a similar opportunity for short to medium term players.
Bharti Airtel: Buy | Stop loss: Rs 410 | Target: Rs 530
The stock is forming a rectangle consolidation between the range of Rs 550 and Rs 200 since the last 12 years. Recently, in the month of November 2018, the stock has retested the lowest low of Rs 250, and reversed back sharply. It seems it would result in retesting of upward boundary, which is at Rs 550.
State Bank of India: Buy | Stop loss: Rs 300 | Target: Rs 400
The stock has been one of the outperformers in its segment and has consistently seen buying attraction at lower levels. It is forming rectangle formation, which is an indication of bullish consolidation and which is likely to break on the upside.
Hindalco Industries: Buy | Stop loss: Rs 200 | Target: Rs 250
The stock has given breakout from falling wedge pattern on weekly chart which is bullish for it. As per relative strength comparison the stock performing better than other stocks from the same basket.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.