The Indian rupee successfully retested its multi-year breakout zone of 69 and is poised to retest its previous zone of Rs 74.5/$ and could even breach it. Rupee headwinds will put further pressure on the equities going forward, Amit Shah, Sr. Technical Analyst, Indiabulls Ventures Limited, said in an interview with Moneycontrol’s Kshitij Anand.
Q) Nifty50 closed with gains of nearly 2 percent but the momentum fizzled out from the high of 11,100. What is leading to the nervousness on D-Street despite positive measures announced by the government. in the week gone by?
A) The Nifty50 slipped from 11,100, and made a lower low but then bounced back. The zone of 10,750 is a strong support area for Nifty, and it looks like the index is expected to test 11,300-11,500 levels on the upside.
Q) Rupee breached Rs 72/$ mark in the week gone by. Where do you see the currency headed in the near term, and what is causing the volatility?
A) The Rupee successfully retested its multi-year breakout zone of 69 and is poised to retest its previous zone of Rs 74.5/$ and could even breach it. The rupee headwinds will put further pressure on the equities going forward.
Q) What does the rollover data suggest for September series? Do you think the market is likely to remain under pressure? Top stocks with long or short rollover.
A) Rollovers are slightly on the lighter side, but, as mentioned earlier we do see the index rallying towards 11,300-11,500 zone. A lot of pessimism is already baked in the price in the short-term.
Piramal Enterprises had a strong rollover and is poised for upside towards Rs 2,200. Escorts too had strong rollover and is likely to see upside towards Rs 540 zone.
Q) Top stocks which hot fresh 52-week high include HDFC AMC, Asian Paints, Bata India, Apollo Hosp, Dr Lal Pathlabs, and Berger Paints. Most of the names are companies with quality management – do you think TINA factor is playing in some of these stocks, and the momentum will go on for some more time?
A) In such kind of markets, there are limited options to hide and park money. There is more juice left in the current environment for these stocks. Till markets are nervous and fragile these stocks will tend to do well.
Q) India GDP data will be out later today. How will the markets read into the numbers?
A) Slow down in the economy has been witnessed in recent past which reflects in the consumption across various sectors, however easing of liquidity and additional spending by the govt would result in revival.
In the near term, a lot of negatives and pessimism are priced in. We do see Nifty rallying higher towards 11,300-11,500 zone.
Q) Any big cues to watch out in September month which could dictate the trend?
A) Steps taken by the FM are definitely in the right direction something which is not priced in, in the near term.
Also easing of liquidity for the govt should be read positively as it got a large chunk from the RBI. The market would also watch out for trade talks developments between the US and China closely.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.