“I feel that eventual levels that we could see on Nifty would be 17,850, 17,900 in the next few sessions. And just to add to this, Bank Nifty has also started showing a good traction,” says Sudeep Shah, SBI Securities.
Let us start with your view on the market. Three, four, five days of gains. What is the way ahead?
What is happening in the markets in the last few days is that we have had a very fast move from 16,800 to 17,700 odd levels and now we are facing some kind of resistance there. But one positive which I can notice that slowly and steadily ex Reliance a lot of other large caps are participating. For example, yesterday it was Tata Motors, today it is Kotak Bank. ICICI Bank has once again started showing some kind of leadership skill. So, markets can at the most be in a consolidation range for a day or two, but I feel eventually they are headed up for the upside. And from a Nifty standpoint, 17,550, 17,600 levels will be a very good support because if we see the derivatives data for the current weekly expiry as well as the next weekly expiry, there is some serious put writing happening in 17,700 as well as 17,600 puts, so that makes 17,530, 17,550 zone all the more important and this is also now the 200 DMA, so this will act as a very strong, sticky support on the downside and till the levels of 17,530 are held.I feel that eventual levels that we could see on Nifty would be 17,850, 17,900 in the next few sessions. And just to add to this, Bank Nifty has also started showing a good traction.
Last few days, we were seeing Bank Nifty struggling around 41,100, 41,000 kind of levels, but today with this gap up and it has maintained this gap on the upside and it is still holding on to the gains. So, I feel 41,000 will now act as a strong support until this holds. We will see Bank Nifty move on to 41,700, 41,800 in the next few sessions to come.
What about the stock specific recommendations?
Stock specific, if we see, my first pick would be ICICI Bank. Since I am expecting Bank Nifty to move up from the current levels up to 41,700, 41,800, I feel after HDFC Bank and Kotak Bank which has already moved in the last few days, now it is time for ICICI Bank which was the leader of the last year’s bull run in Bank Nifty, so this stock is now sustaining above its 200 DMS in the last seven-eight sessions.
Stock is also taking good support at around 860-865 levels and it is trading above all its short and medium term moving averages. So, with the kind of setup that the stock is showing, I feel that the stock is headed up to Rs 920-930 in the next few sessions and we could keep a stop loss of Rs 865 for the same. Now, second pick would be TVS Motors. In the last couple of days, we have seen the auto stocks rebounding, showing some kind of a traction followed by Bajaj Auto, Eicher Motors and now TVS Motors. So, my pick would be TVS Motors. Stock was resisting around 1080, 1100 kind of levels, now when it is sustaining above that level I feel the stock could move up to 1140-1150 in the next few sessions and one can keep a stop loss of Rs 1080 on the downside.