We have witnessed a sharp upside bounce in Nifty in the last three weeks, but this is going to be a temporary trading bounce, and there is a possibility of weakness in the market/broader market from the higher levels, Nagaraj Shetti, Technical Research Analyst at HDFC Securities said in an exclusive interview with Moneycontrols Kshitij Anand.
Q) The Nifty50 rose over 1.4% for the week ended 13 April 2018 despite wild movements in either side. How do you see markets panning out in the coming week?
A) The near-term trend for the Nifty is still positive, and the index which is still sustaining above the hurdle of 10,450-480 levels for this week is likely to have a positive impact for next week. Hence, one may expect upside levels of 10,650 by next week.
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Q) Nifty flirted closed above its 200-DMA, and 100-DMA in this past week, but there are plenty of stocks which are trading above their long-term average. Are these stocks a value buy at current levels?
A) We have witnessed a sharp upside bounce in Nifty in the last three weeks, and this has given a space for beaten down sectors to outperform.
This is going to be a temporary trading bounce, and there is a possibility of weakness in the market/broader market from the higher levels. Hence, outperformance in the stocks can be used for creating trading long positions by placing strict stop losses.
Q) What is your call on smallcap and midcap stocks? Should investors stay away or just book profits on rallies?
A) The main trend of mid and small cap sector is down, and the current upside bounce is expected to halt at the higher levels. An investor should stick to profit booking from the long trading positions at regular intervals
Q) What should be the ideal strategy of investors in April series buy on dips or sell on rallies?
A) The near-term trend of Nifty is positive, and there is no indication of any exhaustion of current upside bounce in the market. One may continue with trading long positions in the index/stocks and ride a trend. Place strict stop loss.
Q) Top 3-5 positional call which could give handsome returns to investors in April series?
A) One may look to buy Escorts, Glenmark Pharma, DHFL, Jindal Steel, Tech Mahindra, Hindalco, and Wipro, at the current market for the next few weeks.