could see some consolidation
and other sectors like IT and pharma could see some action in the week ahead , says the independent market expert. Excerpts from an interview:
Just looking at the data for the week gone by we see the index has put on about 2% while top sectoral gainers including the likes of pharmaceuticals and real estate have done very well. On the flip side PSU banks have not quite managed to do well. What is the basis of the sectoral churn that you have observed in the markets as we wrapped up the trading session at 13,760?
I think the liquidity flow is extreme. The gush of liquidity is extremely strong for the market and we are in the seventh straight week of the Nifty moving up higher. Seven weeks back the index was at 11,000-11,200 and now we are talking about 13,700 levels. So it is a huge rise for the index in the last seven weeks and surprisingly the major chunk of the rally had actually happened at the start of the last seven weeks period and now the index is just about going through more of a inertia kind of a motion where it just keeps on moving up higher irrespective of which sectors and which stocks tend to participate and push the index higher. That is a clear sign of a strong gush of liquidity and which is why I think short term traders may probably not have a major complaint as such.
So yes, last week was a bit iffy because you had a lot of volatile, intraday shake off from the market but net-net when you look at the Nifty it closed 1.5-2% higher which is kind of a positive close.
The Bank Nifty was a bit muted in terms of price performance but I believe that this is a very strong kind of a market. You will have those odd sector churns in between and I think on Friday we saw a specific tilt and a bent towards the defensives where we saw the Nifty IT and pharma stocks picking up pace.
But I think that was likely the texture for the markets for the last six, seven weeks that every sector and every stock managed to participate in bits and pieces and the index has kept on moving up higher. So if this is just a phase then I believe Nifty and Ban Nifty could consolidate and you might see some action in IT and pharma stocks. But I think the bias is still bullish for the index till the time it trades above 13,500 support.
What are some of your top trades?
I have two buy calls and both on individual stock action; first one is a buy on JSW Energy. I think it is an excellent chart in the making both on the short term as well as on the medium term to slightly longer term aspect. The stock has confirmed a lot of breakouts on multiple timeframes and especially on the short term charts. I believe that the stock should be in the thick of extremely strong momentum going forward. So I have a buy on JSW Energy with targets of Rs 80 and a stop loss of Rs 65.
My second pick is Cummins India. This is the stock we discussed extensively last week as well and it finally managed to break out of the Rs 600 mark. So I believe from a positional play Cummins India could also be a good buy. The targets should be kept at Rs 650 with a stop loss of around Rs 590 mark.