On Friday, the sentiment just completely reversed from what we were holding up to between Tuesday and Thursday. How do you see the sell-off in Friday’s session and now that 43,000 has been broken for the Bank Nifty, where are we headed from here on?
Yes, the Bank Nifty has given up the support area of 43,000 on a closing basis in Friday’s session. And now looking at the data setup, we believe that if it continues to remain below the 43,000 level, then we may see another round of selling pressure in the coming trading session. So, 42,500 is the immediate support area where some put writers are still there. Hence, if at all Bank Nifty breaks below those levels, then serious unwinding can be there in the index also and we can see further sell-off going forward. So, below 43,000, one can remain short for a downside target of 42,500 followed by 42,200.Nifty setup, on the other hand, is still looking attractive as the put writers are still there at 17,900, 18,000 strike, so that clearly suggests that on the Nifty front confidence is still there for 18,000 support area. Though on the higher side, 18,200 has witnessed aggressive call writing, so that level is very challenging for the Nifty to breach in the near-term.
So, until Nifty is not able to cross 18,200 level, it may remain in the range of 17,900 to 18,200 for some more time and we may see some consolidation in the coming trading session.
Could you share your view on the Nifty Auto as we saw auto numbers come through last week. How are you looking at some of the auto names?
The auto sector is still outperforming and looking at most of the stocks from the auto sector, we believe that the two-wheeler space can continue to run-up. Most of the two-wheeler stocks are witnessing good buying interest and furthermore most of them are trading above their near-term breakout levels.
Even from auto ancillary, tyre space is also looking very attractive. The stocks like MRF, Balkrishna Industries and from the cash segment Ceat are looking very interesting and the kind of buying interest which we have seen throughout the week is clearly suggesting that this sector can continue further more upside from the current levels.
So, from the automobile space, TVS Motor stock could be bought at the current level also. Stock is enjoying almost its all-time high trajectory and looking at the setup we believe that TVS Motor can continue towards Rs 1300-1330 level. So, TVS Motor is a buy with a stop loss of Rs 1170.
Another stock from the automobile space is Hero MotoCorp. Stock has shown recovery from its recent low and looking at the buying action, it is almost a third-fourth consecutive week where we are seeing sustained buying happening in the stock and the stock is recovering from its recent swing low. So, looking at the setup, we believe that the stock can hit a target of Rs 2650-2700. Hence, Hero MotoCorp is also a buy with a stop loss of Rs 2450.
Last time you said that till gold holds $1980 levels, the bullish stance in the yellow metal will remain and this is what exactly happened. Now gold is not far from its all-time high levels in the international markets. So, what is your outlook on the precious yellow-metal?
We believe gold can continue further more upside as it is enjoying an almost all-time high trajectory in the Indian market and looking at the prices, we believe that this momentum can extend further higher. In dollar terms, we see the immediate target for gold as $2100-$2140. And if we talk about the MCX prices, we believe that Rs 63,000 could be the immediate target for gold amid the ongoing run-up.
So, gold is looking very bullish and you can go by the buy on dip strategy. Now, stop losses should be trailed to the higher side. Earlier, stop loss was at around $1980, but now it needs to be at around $2000 for holding your long position on the gold.
Crude is currently hovering around a 5-week low, what is your outlook on the commodity?
If crude remains below $74 then there could be further more pressure on the commodity. So, in such a case it can go down to $68 or even $65. Hence we maintain a bearish outlook for crude currently.
If any pullback comes towards $72, $73, it is a shorting opportunity with a stop loss of $76 and we believe that crude can fall further from the current level.
If we talk about the MCX level, the immediate support area for crude is around 5680 level. If it breaks those levels, then on the MCX too, the next level for crude is around Rs 5300 on the downside. So, sell on rise is the strategy until the crude does not cross above 6200 level on the MCX.
What are your top recommendations for the upcoming week?
The FMCG sector is seen to run-up furthermore from the current levels. So, Asian Paints is the first stock we are bullish on and the stock is currently trading above Rs 3000. One can buy the stock for the near-term target of Rs 3150, keeping a stop loss of Rs 2960. From the auto space that we like, one can hold a long position in TVS Motor for further run-up.
From the capital goods space, Siemens is our choice as it can continue its upward momentum. The stock is almost trading at its all-time high and a series of higher top, higher bottom formation is there. We believe that the next target for Siemens could be around Rs 3800. So, one can buy this stock with a stop loss of Rs 3520.