Investors should view markets with sector and stocks specific approach and we don’t recommend to add aggressive shorts but wait for a pullback, Manav Chopra, CMT, Head Research- Equity, Indiabulls Ventures Ltd, said in an interview to Moneycontrol's Kshitij Anand.
Q) The Nifty slipped below its crucial support placed at 10,000 and closed with a cut of nearly 2% for the week ended March 23. Do you think the weakness is likely to continue in the upcoming truncated week?
A) The Nifty violated key support levels with a gap-down opening which will now act as a crucial resistance level on the upside. The index will continue to witness stiff hurdles around the 10,050-10,100 levels which was its previous support zone.
The global indices indicate some more decline in the coming sessions which could add further selling pressure into our markets.
The immediate support is placed at 9950 levels and on a decisive close below expect decline towards the 9850-9800. The markets since past four weeks have declined without any corrective rallies, and we now expect range-bound drift towards the lower levels.
Q) How are FIIs positioned in the market? We did saw some buying in the month of March after being net sellers in the month of February?
A) The US Fed rate hike was already discounted into the price and FIIs have overall been a net seller in our markets since past few months.
Looking at the past trend, FIIs would continue to sell due to global and political concerns. International trade policies would definitely provide some short-term knee jerks but most of these factors would not have an impact on the long-term cycles of the markets.
Q) What should be the ideal strategy for mid & small caps which are underperforming benchmark indices by a wide margin?
A) Since the markets have breached key weekly support levels, we can expect further selling pressure and decline into these high beta midcap indices.
The NiftyMid50 index after series of short-term consolidation decisively breached 4950 levels and indicates decline towards the 4750-4600 levels.
Q) What should be the strategy -- buy on dips or sell on rallies in the coming week?
A) One should view markets with sector and stocks specific approach as most of the indices and stocks are nearing oversold levels. We don’t recommend to add aggressive shorts but wait for a pullback.
Expect IT and select FMCG stocks to outperform in the near term. The Metal index will continue to witness selling pressure and can decline by another 4-8 percent in the short term.
Q) Top 3-5 stocks which are looking attractive at current levels based on technical?
Mahindra & Mahindra Ltd: BUY | Target: Rs 785 | Time period 1 month: The stock saw a breakout from the 1-year diamond pattern and long-term trend remains bullish
Ashok Leyland Ltd: BUY | Target: Rs 275 | Time period 1 month: The stock breached falling trend line which confirms a trend reversal.
Power Grid Ltd: BUY | Target: Rs 215| Time period 1 month: The stock saw a bullish reversal formation on the weekly charts which indicate limited downside from the current levels.
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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