Jay Thakkar, Chartered Market Technician – Head Technical and Derivatives Research - AVP Equity Research at Anand Rathi Shares and Stock Brokers, expects the market to trade with a negative bias in the July series. “The range for the index is 10,200-10,950 levels.”
Excerpts from his exclusive interview with Moneycontrol's Sunil Shankar Matkar:
Q: Do you expect the market to consolidate in the July series? Will the Nifty cross 11,000 soon?
A: We expect the market to consolidate or trade with a negative bias in the July series. The range for the index is 10,200-10,950 levels. For the index to form fresh life highs and inch towards 11,500 levels it needs to cross 10,950 to move upward.
Q: Is it going to be the Nifty Bank index that lifts the Nifty to fresh record highs in the second half of 2018? What is your view on the Nifty Bank index? All pharma and IT counters have rallied big of late. What are the charts suggesting for these indices?
A: Once this consolidation is over, we will definitely see the index touching fresh life time highs. This will surely support the Nifty Bank. State run banks are likely to see a relief rally in the next round of the upside.
We had called for a bottom in the Nifty IT way back in December and it happened as anticipated. Our targets were 14,000 and 18,000, of which 14,000 has been achieved. We believe that by the end of this fiscal 18,000 will be achieved as well.
We were also fortunate to call for a bottom in the Nifty Pharma in the last week of May and that has turned to be quite positive. Nifty Pharma has provided a breakout from the falling wedge pattern which is a bullish reversal. The targets for this calendar year are 10,230 and 11,000 levels.
Q: Midcap and smallcap stocks have been falling so far this year. Do you see them falling more?
A: The pain in the mid and smallcap space isn't over yet. They will see one more round of downside before the index touches new highs. The Midcap Index has been falling in a downward sloping parallel channel. The minimum target on the lower side comes at 17,900, whereas the same for the smallcap index is 7,000.
Q: Which sectors should one look at in the July series for positive returns?
A: Pharma is the only sector which is showing a clear uptrend right now. This is just the start of a fresh uptrend and it is likely to stay for few more months. On the upside, we expect a minimum target of 10,230 on Nifty Pharma. Its support lies at 8,500 and 8,300 levels.
Q: Can give us five positional calls that could provide handsome returns in the next 1 month?
A:
Glenmark Pharma: Buy | Target - Rs 665 | Stoploss - Rs 540 | Return - 13%
Glenmark has provided a breakout from the falling wedge pattern with a clear buy crossover in its momentum indicators on the daily as well as weekly charts. The weekly indicators have been showing positive divergence since one year which is also quite positive going forward.
Sun Pharma: Buy | Target - Rs 630 | Stoploss - Rs 525 | Return - 13%
Sun Pharma has clearly provided a breakout from the double bottom pattern which is a bullish reversal pattern. The momentum indicators are also well in buy mode at all the degrees which is a confirmation of a reversal from down to up.
TCS: Buy | Target - Rs 2,020 | Stoploss - Rs 1,740 | Return - 11%
TCS has provided a clearly breakout from the falling channel with a buy crossover in its momentum indicator MACD which is a bullish sign going forward.
Mahindra CIE Automotive: Buy | Target - Rs 310 | Stoploss - Rs 251 | Return - 14%
The stock has provided a breakout from the symmetrical triangular pattern along with a positive buy crossover in its momentum indicators.
Mahindra Lifespace Developers: Buy | Target - Rs 750 | Stoploss - Rs 575 | Return - 17%
The stock has provided a multiyear consolidation with a clear buy crossover in its short term moving averages and its daily and the weekly MACD.
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.
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