Talk to us about how you are viewing the market. It was a very range-bound market yesterday. You had the likes of certain sectors, like the PSU Bank which was in focus. How do you view the current setup?
Now, coming to markets, see, what has happened is that, we are all in a truncated week right now, there were midcaps, as well as the Fin Nifty expiry was there. So, we saw some kind of pressure building on the Fin Nifty side of the market also and there is some selling pressure from higher levels in Bank Nifty from 46,250-46,300 and this is more likely ahead of the FOMC meet that the announcement which is due on Wednesday and which will impact the markets on Thursday.So, last week, we saw ECB raising rates. We saw China cutting rates and now, all eyes are on the Fed on the stance that it is going to take on Wednesday. So, ahead of that, along with all this news regarding crude prices moving above $93-94 a barrel, dollar index sustaining at 105 and above those levels, so that is putting a pressure on the banking, as well as the financial names in general.But just we have to take out the PSU stocks out of this entire discussion because PSU banking is on an altogether a different orbit right now. So, apart from that, we saw some kind of pressure in HDFC Bank, Kotak as it is not moving. So, it was only Axis Bank and ICICI Bank which were trying to hold on for the major part of the day but that also witnessed some pressure from higher levels in the last half an hour.
All in all, what I feel is if I see that derivative data, now if I see where the Bank Nifty derivative data is placed, now there is a significant put writing has been witnessed in 46,000 strike price and there are call writers active at 46,000, 46,100, 46,200, 46,300.
I feel we could be in for a range bound expiry from a Bank Nifty perspective with the range being 45,800 on the downside and 46,200 on the upside. So, banking could be in a range. What we feel is from a Nifty perspective, what could support Nifty going ahead is the auto index, as well as along with the auto, we feel IT could have one more leg on the upside.
Overall, from a Nifty standpoint, we feel the overall support would be around 20,050 kind of levels and till this holds, this could move up once again back to 20,250.
But the market is quite range bound and in this kind of scenario, what are the top picks that you are betting on?
Top picks, the first one would be from the auto sector and that is Hero MotoCorp. We have seen Hero breakout of the consolidation. Now, this consolidation has started, it is a month, around 25, 27 sessions consolidation that we had witnessed in this stock and with the auto stocks moving, we saw Bajaj Auto, TVS Motors. Hero was yet to catch up and we made some kind of decent move in Hero Moto also.
So, if we see from March, the stock has moved in a big way from 2300 to 3200 and then it witnessed some kind of a consolidation retracement and once again, is now picking up the trend on the upside.
So, daily as well as weekly charts are equally strong and we feel from the current levels one can buy Hero Moto with a stop loss of 3050 and a target of 3250 on the upside.
Our second pick would be ICICI Pru. Insurance stocks in general in the last few days we have seen some good momentum being built up and all these stocks, whether we say HDFC Life, ICICI Pru, all these stocks have given up good momentum and especially ICICI Pru, the stock is sustaining above its short-term moving averages whether it is 20-day exponential moving average, it is trading even above 50, 100, all major moving averages on the daily and weekly charts and even this stock was under a decent consolidation.
Now from around 18th of July till date the stock was in a consolidation and yesterday and today two sessions like on Friday and today we have seen a breakout and today’s move above 595, 597 has confirmed the breakout.
So, what we feel is that the stock can be bought from current levels and on all dips and the stop loss for the same would be 580 and on the upside we could see levels as high as 635, 640 on this stock and one more reason if we see that in August 2022 the stock has made a high of 596 and post that this is the first time that the stock has closed above 600.
So, this is an important close for the stock after almost one year and three months the stock has closed at this level. So, kind of when we are seeing markets under pressure, when we are seeing a lot of sectors and stocks witnessing a bit of profit booking from higher levels, this stock is outperforming the broader indices. So, I feel that this can be bought at current levels with 580 stop loss and 635 target on the upside.