On Friday, sentiment completely reversed from what we had held until between Tuesday and Thursday. How do you feel about Friday’s sell-off and now 43,000 has been broken for Bank Nifty, where do we go from here?
Yes, Bank convenient abandoned the 43,000 support area on a closing basis during Friday’s trading session. And now looking at the data setup, we think if it sustains below 43,000, we could see another round of selling pressure in the coming session. So 42,500 is the immediate support area where some traders are still standing. Hence, if Bank Nifty breaks below those levels, a severe pullback is also possible in the index and we could see the next sell-off in the future. So below 43,000, one could continue selling for a downside target of 42,500, then 42,200. On the other hand, the nifty setup still looks appealing as the options writers are still there at the 17,900, 18,000 strike so that clearly shows that on confidence ahead Nifty is still there for the area. 18,000 support. On the higher side though, 18,200 saw active call writing, so that level is hard for Nifty to breach in the near term.
So until Nifty fails to break above 18,200, it could stay in the 17,900 to 18,200 range for some time and we could see some consolidation in the upcoming trading session.
You can share your views on Nifty Auto as we saw the auto numbers come out last week. How are you looking at some auto names?
The auto sector is still doing well and looking at most stocks from the auto sector, we believe the two wheeler space can continue to grow. Most two-wheeler stocks are having good buying power and moreover most of them are trading above short-term breakout levels.
Even from the auto ancillary, the tire space looks very appealing. Stocks like MRF, Industrial Balkrishna and from the cash segment meat is looking very interesting and the type of buying interest we have seen throughout the week clearly suggests that the sector could continue to rise further above current levels.
So from the automotive space, TVS . engine Stocks can also be bought at current levels. The stock is enjoying its near all-time high trajectory and looking at the setup we believe TVS Motor could continue towards the Rs 1300-1330 level. So TVS Motor is a buy with a stop loss of Rs 1170.
Another stock from the auto space is Hero MotoCorp. Stocks have shown a rebound from recent lows and looking at buying action, this is almost the third week in the fourth straight week that we’ve seen continued buying in stocks and shares. is recovering from recent lows. So looking at the setup, we believe the stock can hit the target of Rs 2650-2700. Since then, Hero MotoCorp also a buy trade with a stop loss of Rs 2450.
Last time you said that until gold holds the $1980 level, the yellow metal’s uptrend will remain and this is exactly what happened. Now gold is not far from its all-time high in international markets. So, what is your outlook on the yellow precious metal?
We believe gold can continue to rise further as it is on a near-all-time high trajectory in the Indian market and looking at the price, we believe this momentum can extend even higher. In terms of the dollar, we see gold’s immediate target at $2100-$2140. And if we talk about MCX We believe that Rs 63,000 could be an immediate target for gold given the rising gold price.
So, gold is looking very bullish and you can take a buy strategy when the price drops. Now, the stops should be pulled higher. Before, the stop loss was around $1980, but now it needs to be around $2000 to keep your gold long position.
Crude oil is currently hovering around a 5-week low, what is your outlook for this commodity?
If crude remains below $74 then there could be more pressure on the commodity. So in such a case it can drop to $68 or even $65. Therefore, we maintain a bearish outlook on crude oil for now.
If any pullback is towards $72.73, it is a short selling opportunity with a stop loss of $76 and we believe crude oil could fall further from current levels.
If we talk about MCX levels, the immediate support zone for crude oil is around 5680. If it breaks those levels, then on MCX too, next level for crude oil is around Rs 5300. So selling on a rise is the strategy until crude oil fails to break above 6200 on MCX.
What is your top recommendation for next week?
The FMCG sector is expected to rise further from current levels. Therefore, painted asian is the first stock that we are bullish on and the stock is currently trading above Rs 3000. One can buy this stock with a short term target of Rs 3150, keeping a stop loss of Rs 2960. From the car we like, one can take a long-term position at TVS Motor to continue to grow.
From the space of means of production, Siemens is our choice as it can continue its upward momentum. Stocks are almost trading at an all-time high and a series of higher highs and higher lows are forming. We believe Siemens’ next target could be around Rs 3800. So, one can buy this stock with a stop loss of Rs 3520.