On last Friday, the Nifty PSE index hit a fresh all-time high after January 2008. "We are very bullish on the PSU space," Santosh Meena, Head of Research at Swastika Investmart said in an interview with Moneycontrol.
From the PSU basket, "REC has witnessed the breakout of Rs 127 level after 4 years of failed attempts, so we can expect good momentum. We can expect an immediate target of Rs 138, while Rs 150 is the next target, and Rs 125 should be your stop-loss," he says.
On Rail Vikas Nigam which has already witnessed a big run-up, Meena, who has more than 10 years of experience in the financial markets with expertise in technical and derivative analysis, says as of now it seems that the stock may see one more leg of the upmove towards Rs 120 before the momentum cools off.
Therefore, traders should follow a trailing stop-loss approach where Rs 99 is an immediate stop-loss, he advises.
Is it looking like a sustainable rally for the Nifty50?
The Nifty has been in a structural upswing since March 2020, with a healthy time-wise correction lasting more than 1.5 years. Now that Nifty has broken the structure of lower highs and lower lows and started a structure of higher highs and higher lows. There are signals that Nifty is prepared for a new expansion phase.
The bullish Inverse Head and Shoulders formation has a breakout, which could aid in the Nifty regaining its prior record high of 18,888. After a big advance in April, there may be some retreat or consolidation but any dip will be an excellent buying opportunity. On the downside, 17,800 serves as an immediate support level, and the range between 17,500 and 17,400 has turned into a floor.
If it is a sustainable rally, which are the sectors that could drive the northward journey?
The leader of this bull run is Bank Nifty, and we believe the leadership will remain intact. However, the Reliance Industries chart is looking very lucrative, which may help the Nifty head towards its all-time high.
The capital goods segment is clearly one of the strongest sectors, and L&T may continue to do well. My eye will be on PSU stocks because on Friday, the Nifty PSE index hits a fresh all-time high after January 2008. So there is a clear breakout after about 15 years. And last week, we saw a lot of activity in many PSU stocks.
Your top three picks for this week and why?
From the largecap space, Reliance Industries will be my top pick, which is witnessing a breakout of bullish Inverse Head and Shoulder formation. In Reliance, we can expect an immediate target of Rs 2,460, and Rs 2,530 as the next target level while Rs 2,360 should be your stop-loss. From the PSU basket, REC has witnessed the breakout of the Rs 127 level after 4 years of failed attempts, so we can expect good momentum. We can expect an immediate target of Rs 138, while Rs 150 is the next target, and Rs 125 should be your stop-loss.
Info Edge (Naukri) is another counter that is bottoming out with the classic Inverse Head and Shoulder formation. While Rs 4,000 and Rs 4,200 are imminent targets, Rs 3,700 should be your stop-loss.
Is Rail Vikas Nigam looking overbought now after a stellar run of over 35 percent?
As I said, we are very bullish on the PSU space; however, Rail Vikas Nigam has already witnessed a big run-up, so we may see some consolidation or pullback. As of now, it seems that we may see one more leg of the upmove towards Rs 120 before the momentum cools off; therefore, traders should follow a trailing stop-loss approach where Rs 99 is an immediate stop-loss.
Is Ipca Laboratories looking oversold after a sharp fall last week?
Ipca Labs underperformed the Nifty Pharma index and witnessed a sharp fall. It has become oversold in the near term; therefore, we may see some consolidation or base-building process around Rs 700 level but traders should wait for confirmation of any kind of reversal.
Do you think 26,000 is really the bottom for the Nifty IT index because in the past also it tested the same levels multiple times?
The Nifty IT index had six months of consolidation around the 26,000 level in 2021, then witnessed a big rally before it topped out. Now this 26,000 level is acting as a strong base.
However, it is too early to say whether it has bottomed out or not because next quarter will be important in terms of earnings because of the real impact of the banking crisis and the US slowdown. Technically, it has to cross the psychological level of 30,000 for any trend reversal.
Disclaimers: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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