First, I would like to talk about the levels and wanted to understand because, of course, the weekly closing looks very strong. We have closed about 22,000 levels and support has also risen now, rising to levels like 22,100, 22,200. From this support now, what do you make of the markets now? Since we understand that the FIIs exposure is still below 50%, what do we make out? Looks more short covering coming week?
Very strong momentum throughout the week. Though the index was volatile, if we analyse the broader market, it was on the buying side only. Most of the stocks on the largecap space as well as on the midcap space have shown very strong rallies throughout the week.
The kind of confidence, the kind of flow which we are seeing on the Street, that clearly shows yes, towards the end of this Feb series we are likely to see furthermore traction on the buying side and possibly Nifty can scale up to the level of 22,400 to 24,500 also in the continuation of this uptrend.
Though there was some pressure on the higher side again on the Nifty, but still if we analyse the overall structure, 22,100 that is the important level on the Nifty spot.
Till these levels are intact, we expect that towards the end of this expiry for Feb series, we can see a level of 22,400 to 24,500 also in the coming days.
Bank Nifty was witnessing some bit of pressure on the higher side again and again it is failing to cross 47,200 that is the major call concentration area.
So, looking at the near-term setup, till Bank Nifty does not cross above 47,200 some pressure is likely to be there for some couple of trading sessions.
Once we are able to take out those levels, then yes, there could be a short covering rally we can witness in the Bank Nifty also and that possible target towards 47,600 to 47,800 will unfold going forward.
But on the downside, 46,500 is likely to act as a good support area for the near-term trend as most of the put writers are taking their position around those levels.
So, 46,500 may act as a good support area in this decline for Bank Nifty. So, buy on dips should be your strategy for both the indices at this moment.
Let us talk about the entire banking space because what a paradox we have seen right over the course of the last week, Nifty Bank sector up 1%, Nifty PSU Bank sector almost down 1% and we have been seeing that PSU banks have been lagging over the course of the week. Banks, however, when we talk about private banks, they are doing pretty well for themselves as we speak. So, if you had to pick between the two, are you going to place all your bets on the private banking sector or the PSU banks and what should our viewers do going ahead and how should they navigate this entire banking paradox that we are seeing right now?
We have seen throughout the week, there was a volatile week for most of the banking stock. Though some of the private banks have done well, still if you analyse the overall sector under pressure, it was there. Some of the private banks that we like at this moment, ICICI Bank, are our preferred choice at this moment.
Overall structure is bullish, though some pressure was there on the higher side but still stock is showing good strength on a weekly as well as on the monthly time frame.
So, till ICICI Bank is holding about 1040-1030 mark, the trend is likely to remain on the bullish side and we believe that this stock out performance is likely to be there from the private sector bank and possible target we can see on a higher side towards 1120 to 1140.
If we talk about the PSU bank, yes, some pressure was there in most of the PSU banks but still if we analyse the longer-term time frame most of the stocks are still enjoying above their breakout levels, stocks are trading above to their short-term, medium-term moving averages.
So, this corrective move should be used as a buying opportunity in most of the PSU banks. We like Canara Bank at this moment though some corrective move was there but still in this correction if you get any opportunity to buy Canara Bank towards 560-555, so again that is again attractive level to re-enter in this stock as overall structure of Canara Bank is on the bullish side, then one can keep stop loss of 535.
On the higher side once stock crosses above 605, possible targets we can see towards 640 to 650 on the Canara Bank. Another stock from the PSU basket that we like is PNB, Punjab National Bank. This stock is consolidating at a very narrow range and the strong behaviour is clearly indicating that once Bank Nifty or banking stocks settle down at a certain level PNB can continue its outperformance and possible target we can see towards 145 to 150. So, PNB is another stock where one can buy and accumulate with a stop loss of 122.
Where would be the money making avenues for the coming week? What will be your top picks?
First stock is JSW Energy. On a daily chart stock managed to give a breakout of its consolidation range and looking at the overall structure, stock is in uptrend, stock is enjoying its all-time high trajectory. So, we believe that JSW Energy can show some traction in the coming week, 540 could be the possible target, one can buy this stock with stop loss of 495.
Another space that we like is real estate and from that space we like Godrej Property. If we analyse the overall structure for Godrej Property, on a weekly chart stock is now forming a rounding bottom sort of formation and stock is on a verge of giving breakout of its previous swing high.
So, looking at overall structure for Godrej Property, a long build-up was there in today’s session also. We expect Godrej Property can continue furthermore upside, 2550 could be the possible target and one can buy this stock with stop loss of 2430.
And the third stock is from the automobile pack and that is Mahindra & Mahindra. Clear outperformance is there, stock is enjoying its all-time high trajectory. The kind of traction which we are seeing in the Mahindra & Mahindra that clearly shows towards the end of this Feb series we may see levels towards 2000 also.
So, one can look to buy Mahindra & Mahindra for an upside target of 2010, keep your stop loss of 1900.
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