How are you looking at the overall market setup given that the Nifty50 index has managed to scale the 15,100 mark. What are your expectations from the long-term trajectory?
Frankly, it has been an absolutely blockbuster week for the markets. There are many important data points that we can discuss. The first and foremost is the extension of the handover that was given last week. If you remember, last week on Friday, Nifty50 was at one point hanging around 14,500-14,600 and we were on the verge of breaking that support level. Bank Nifty was closer to just below the 33,000 mark and we were at one point trying to break below those kinds of significant levels. But this week has been a revolution week for the market, purely because of the fact that the banking index has managed to make a very strong comeback. I think that has been the show stopper.
This week, the more credible weightage goes towards select banking stocks. So it is not that all the private sector banks have done exceptionally well. You had ICICI Bank, which had done pretty well in terms of leadership, but then PSU banking stocks took the charge, specifically in the last couple of days where you saw SBI, the likes of Bank of Baroda, PNB, Bank of India, Indian Bank, and many other banking names started to pick up. That even when there was a lot of negative news flow around these stocks. Then you had the PSU stocks like the OMC pack, which did exceptionally well, and a couple of other sectors which also made a good comeback, like the cement makers and auto manufacturers. So net-net, when you look at the analysis of this week, there were a lot of positives because large caps managed to make a comeback and the midcaps managed to stay afloat.
Now when you are in such kind of scenario in a week in terms of market texture, there is always an expectation that there should be more continuation of trend on the upside. So for the next week, or for the next couple of weeks, I would be looking at Nifty50 trying to scale back above its all-time high levels, the 15,400-15,450 plus zone. For Bank Nifty, I would expect at least another 1,500 to 2,000 points over the very near term.
What is the view on Motilal Oswal? Have you looked at Chennai Petro and Shriram City on the charts?
I want to look at all of them but yes, Motilal Oswal has been one of the stocks that I have been monitoring closely, right from the time when it was at Rs 1,200-1,400; I think it was 2017 or 2018. The stock is forming a classic rounding bottom pattern from those 2017-2018 highs of Rs 1,400. It went through a sharp phase of correction. That took a lot of time, I think almost two-and-a-half years. After that, there was a correction to try and consolidate at the Rs 600-750 mark. Now, it is very recently that you are seeing a pickup in price action. For this month, specifically, why it is very interesting to see a stock like Motilal Oswal is the monthly volume. This has been the best monthly volume the stock has seen over the last 6-7 years, if I am not wrong, on NSE. That means that there has been a strong accumulation on the stock at the current month levels.
The stock has already perched at 8-9-month highs but is yet to cross a lot of resistance along the way up. First resistance is at Rs 850-890, and then, you are looking at maybe Rs 1,200-1,300 as the next target range. The stock should come back into an attractive kind of territory because of this month’s volume and the pickup that happened in the last couple of days. I believe that a possible breakout on the upside should happen in this stock, and if it happens, you could be looking at at least Rs 1,200-1,300 target range over the medium to long term.
What is the road ahead for Nifty Bank and what are your top trading picks?
Specifically, on the Nifty, I would expect maybe a touch-back towards a new high either next week or in the next couple of weeks. I think a few stocks remain extremely bullish on the overall benchmark indices. I am expecting large caps to outperform. There are two buy calls that I want to suggest at current levels. The first one is from the PSU banking pack, which I have been very bullish on for the past couple of weeks. SBI is one of the stocks that are looking extremely charged up. We discussed this and recommended it on Friday as well that the stock looks exceptionally strong after results. We have seen a very strong closing for SBI above Rs 400 levels. I would expect the stock to see a strong follow-through price action over the next one or two weeks. I would look out for Rs 424 as the target range on the stock and a stop loss could be kept at Rs 387.
The second would be again from the largecap space. It is a ‘buy’ on Bharti Airtel. After almost two weeks of mild correction, the stock seems to have formed a short- to medium-term bottom at Rs 520, which I believe is very, very crucial and important support for the stock price. So keeping Rs 505 as a stop loss, I would suggest a ‘buy’ on Bharti Airtel. I am expecting a very strong revival over the next couple of weeks towards targets of Rs 600 plus.