What is your view on the Nifty after the monster rally on Thursday? A consolidation would be welcomed?
Yes absolutely. Both the weekly and the daily charts are showing two different things. The weekly chart shows very strong candle stick for the second consecutive week, which is a good sign. But if you count down to the daily charts, Nifty for the first time created a doji pattern on Friday. So, once again, we are seeing signs of uncertainty.
We are going to see a lot of pull and push between bulls and bears at the 10,350 levels. The overall structure for the Nifty and the Bank Nifty, continue to remain in the lower top, lower bottom structure without a doubt.
The overall structure is still not changed for both the indices. But if you come down to the daily charts, we are seeing a very good falling wedge pattern breakout both on the Nifty and Bank Nifty and we could call it early green shoots for the structure to reverse from here on.
We will have to wait and watch because there are two important resistance zones for the Nifty to conquer before we could see this complete turnaround.
The first level is 10,350. Even Fridays high was the same. We have to close above that first of all and secondly 10,420 is the immediate peak of the lower top, lower bottom structure. Once we take both these levels out, we are all set to move higher again.
But still Fridays Doji brings in a lot of question marks. We have a weekend ahead so we will have to wait and see a lot of tweets specifically coming in lot of announcements on the trade war, the tariff war between US-China which is going to play a very important role.
They have been the main trigger for the huge volatility and wild swings that we have seen throughout the week. Fortunately, we have come out of it pretty well and our markets have done pretty well post that. Coming to broader indices, they are taking centre stage. In fact, the midcap index has broken above the lower top, lower bottom structure and that is a very good sign. So, we will get to see a lot of more action in midcap and small cap. The broader indices would take centre stage going forward at least in the short term.
What strategies would you be recommending right now? You have call on Quess Corp and then Bharti Airtel.
Yes absolutely. Quess Corp is a stock that we are pretty bullish on. It is broken down from the symmetrical triangle and one can play for a short-term target of 1140 and keep a stop loss at 1040. Bharti Airtel is one of the weakest links in the Nifty 50 currently and it will continue to show a lot of weakness so one can play for a lower target of Rs 373 and keep a stop loss at Rs 392 on the upside.
What is your call on the pharma pack? Do you think pharma as a sector has bottomed out?
Coming to the pharma index, for the first time, we are seeing a double bottom kind of formation on the weekly charts and that is a very good sign. If this momentum has to carry forward, definitely the large caps have to start participating which we saw in terms of Lupin, Glenmark, Sun Pharma making the top gainers. Definitely, the top performers should continue to be among the large caps and we would prefer Biocon and Aurobindo Pharma and also Sun Pharma. These are three stocks that we are pretty bullish on.
Any view on NBFC names or housing finance companies? Do you feel that they can do better?
Yes absolutely. In fact, LIC Housing Finance is one such stock that I am really looking out for in the near future. If you check the weekly charts, it has finally made a comeback and it has managed to also breakout from this declining channel patterns, which is a very good sign. These are early signs of a reversal pattern for any stock and LIC Housing Finance is one such stock that we are pretty bullish on and in the short term, we will definitely see LIC Housing moving past the 600-levels in the short term LIC is something that we really like from a technical perspective.