One bright side that has driven the rally in metals is china’s Manufacturing Output which has significantly improved, being the biggest metal exporter in the world, Gaurav Garg, Head of Research at CapitalVia Global Research Limited, said in an interview with Moneycontrol’s Kshitij Anand.
Q) Bulls remained in control of D-Street in the week gone by. What led to the rally or the optimism?
A) Optimism over monthly jobless claims for the month of July along with reopening of the economy after lockdown has pushed the economy to some level of optimism despite increasing COVID-19 cases.
Pick-up in demand especially in the manufacturing sector is leading to optimism compared to the first quarter where we had lockdown for the majority of the time.
Telecom and technology stock have given a good set of numbers in Q1FY21 which has boosted bull’s confidence and helped the index to move in positive territory.
Sectoral rotation to defensive sectors like FMCG, Pharma and Technology stocks gave helping hand to rally.
Q) Sectorally, Metal & Consumer Durables hogged the limelight in the week gone by. What is driving the rally in these sectors?
A) There is a pick-up in demand in the domestic market as the economy is reopening after muted the previous quarter. One bright side that has driven the rally in metals is china’s Manufacturing Output which has significantly improved, being the biggest metal exporter in the world.
Consumer durables has also seen traction with improved demand and some relief in disrupted supply-chain amidst COVID-19.
Q) Any particular data point which investors should watch out in the coming week? And, which are the important levels to track on Nifty50?
A) Domestically, Industrial Production (IIP) and Manufacturing Output will be important data to watch out. And globally, US Non-farm Payrolls, Unemployment Rate data will be in focus for next week’s market action.
The benchmark indices Nifty-50 is trading in the range of 11,000 to 11,300. This week Nifty traded in a narrow range of 400 points quite similar to what has happened over the last three weeks. However, bias is still positive for Nifty as major support levels are still intact.
The level of 11,220-11,250 is the range where Nifty is facing some congestion, breaking this level might push index towards 11,500. On the downside, the Nifty needs to hold 11,000 mark as the downside risk might open if the index slips below 11k level.
Q) India crosses Rs 20 lakh COVID cases, Gold above Rs 56000, Nifty back above 11200. How can investors make a sense of this sea-saw puzzle?A) Most of the investors are bullish as the fundamental factors like lower interest rates, negative rates in some economies, an enormous amount of liquidity, and expanded fiscal policy which attracts more retail investors which helped Nifty to move upside.
Currently, the global economy is in contraction phase where gold is in up just because of the high level of ambiguity surrounding the COVID-19 pandemic with the interest of hedge funds as there were record inflows seen in gold-backed ETFs.
Investors should continue to invest a portion of their savings into gold as the uncertainty is going to stay till we have a vaccine and as a result gold, which is a safe haven, is expected to do well.
Q) Small & Midcaps continue with their outperformance in the week gone by. What is fueling the rally in the broader market space – is it undervaluation, flush of money, or investors just chasing growth?
A) Midcap-100 gained more than 4 percent in last week outperforming NIFTY 50. Selective pharma, metal, and automobile from mid-cap space have given good returns last week.
Moreover, investors are looking for opportunities in growth-oriented stocks with attractive valuations that have allured investor’s interest in broader indices.
Q) Any 3-5 technical trading ideas which investors can execute for a period of 3-4 weeks?
A) Following technical trading ideas might give good returns for a period of 3-4 weeks.
Bharti Airtel: Buy: LTP: Rs 560| Target: Rs 605| Stop Loss: Rs 538| Upside: 8%
The stock has witnessed reversal from its support level placed in the zone of 545-550. We can see further strength if it sustains above 560.
The crossover of its short and medium-term averages on daily charts with strong volumes showing signs of further upside. RSI has also turned positive on daily charts, indicating limited weakness in the stock.
Adani Ports: Buy| LTP: Rs 326.40| Target: Rs 365| Stop Loss: Rs 307| Upside: 11%
The stock is witnessing MACD cross-over in daily charts, also resistance breakout from the level of 328 might lead to a decisive breakout. The stock has seen a significant addition of volumes in recent days. Risk/Reward is favorable at this juncture of time.Dabur: Buy| LTP: Rs 512.30| Target: Rs 545| Stop Loss: Rs 498| Upside: 6%
The stock is forming a bullish flag pattern on daily charts and breakout might result in further strength which might lead the stock to break 52-week high.Shriram Transport Finance Company Ltd: LTP: Rs 676.75| Target: Rs 725| Stop Loss: Rs 644| Upside: 7%
The stock is witnessing MACD cross-over on the daily charts, also resistance breakout from the level of 680 which might lead to a breakout. The stock has seen a significant addition of volumes in recent days.
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