3 sectors Rajesh Palviya is optimistic about next week
Clever bank was again at an all time high, and especially the PSU banks played quite a big role in this rally, going forward, what do you think?
So there was a clear divergence for this week in the Nifty as well as in Bank Nifty. Nifty is down almost around 1.10% and Bank Nifty is up 1% this week. Looking at the behavior of both indices, we have almost reached a high of around 18,800 and now Nifty is showing some corrective action. In Friday’s session, we again briefly broke below the 18,500 level, which is a major put concentration area and Nifty challenged those levels.
Now, if Nifty breaks below the 18,500 level as seen in Friday’s session, corrective action can also be expected in the upcoming sessions. Perhaps Nifty can drop even lower towards its next support zone of 18,250. In this corrective phase, Nifty is now trading below its 10-day moving average and challenging its 20-day moving average, so the short-term pattern suggests that some pressure can be seen in the Nifty but on the other hand, Bank Nifty is showing a different picture.
Bank Nifty is on a record trajectory and looking at the overall Bank Nifty setup, we think Bank Nifty can show its strength in the upcoming sessions. Additionally, most PSU banks are now trading above their yearly breakout levels, which is a positive sign. We believe that in the future, more actions from the buy side can be seen in the PSU banking space. Actions like
even and smaller banks like are showing good strength even at the top level and the buy action is there.
Therefore, it is believed that further momentum is likely to continue in PSU banks as well as private banks. Therefore, Bank Nifty may again be an outperformer in the coming week and perhaps Bank Nifty may rise slightly towards the 44,000 level. stop loss on Bank Nifty at around 43,000 and hold a long position for 44,000-44,200 targets.
Next week is going to be crucial as we have scheduled the FOMC meeting and on Friday we saw the markets cool off from their highs. But for Bank Nifty, it was a good week. Going forward, what should be the stocks to look for, leaving aside index and performance?
So we go with three sectors that still look positive despite Nifty’s corrective action. The first is the PSU banking package and within this, the country’s leading PSU bank, SBI, looks very promising.
Given the breakout in the final hour of trade during Friday’s session, there is strong evidence that the SBI may also continue its bullish momentum in the week ahead. We project a target of Rs 645 for . one can buy and accumulate the stock with a stop loss of 607.
Another sector that looks promising is FMCG and from this space we like Godrej Consumer. It is showing good traction for the past four consecutive weeks and we see that a higher high formation is there, which is a clear indication that there is sustained buying in the stock. If we also consider the addition of the open interest front, it clearly shows that the long-built trade has been continued. This is why we believe that
can go even higher from current levels. We project a target of Rs 955 and one can buy and accumulate shares with a stop loss of Rs 900.
Another sector that looks attractive is Capital city merchandise and from this space we love L&T. We have witnessed very strong momentum throughout the week and the stock is doing a series of top-up and bottom-up formation. There is therefore a clear upward trend in the stock and we believe that L&T will continue its bullish momentum. We have a target of Rs 2250 for the coming week for L&T. Therefore, one can buy and accumulate the shares keeping the stop loss at Rs 2100.
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)