ET Now: What a great week it has been! We have touched 10900 on the Nifty and 35,500 on the Sensex. It is going to be an extremely critical penultimate week to budget. And then you have expiry to this all important series. What are we staring at next week?
Kunal Saraogi: The markets are definitely headed higher. There are two ways about it. We have seen a breakout above 10600. One can really worry about the pace of the move but the direction is without a doubt positive. One should continue to have long positions. I expect the Nifty to actually get past 11000 in the current move. One should continue to have long positions. The trend is very fierce and intact and there is absolutely no doubt on that.
ET Now: The distinct factor this week that really propelled the markets higher was banks and banks alone. There was a fair amount of confusion at the start of the week that perhaps FDI in private banks has now been hiked all the way to 100% and then a big denial came in. That was a Times of India exclusive; officials from the ministry telling us that nothing of that was even being mulled at the ministries and no FDI hike is coming in, calling the reports mischievous as well as speculative. Even after this clarification, you did not quite see a reversal of trend within banks. The banks have really put on a very strong show would you say that the Nifty Bank would continue to power ahead even next week?
Kunal Saraogi: Well the chart seems to definitely suggest that. The Bank Nifty had been underperforming the market for the last few months but we saw a very decisive breakout above 26000 and it rose to 27000 in very little time. I definitely expect Bank Nifty to get to 27500 next week itself. If the Nifty is to go up, Bank Nifty definitely will continue to lead from the front. One should have long positions here as well.
ET Now: The one trend which really stood out in the week gone by has been IT. Besides banks, IT really came to the fore. Now that Infosys, TCS, HCL Technologies as well as Wipro have reported their numbers, where do you think IT gains are likely to go from here?
Kunal Saraogi: I think the real story is IT and especially midcap IT. If you look at the midcap IT as opposed to larger caps, that is where the real action is. We have seen a big move in almost all of them. The ones that stand out for me are Mindtree which has got a very robust chart structure. It saw a big gap open few days ago and is now closing above 700. That is one stock one should definitely look at. Persistent System would be another one which has broken out on the chart. Midcap IT is the space to be in.
ET Now: Let us just pick up some of these names one by one. Where do you think Axis Bank is positioned in the banking sector, considering it has earnings lined up next week? How would you trade this one?
Kunal Saraogi: This is a tough stock to trade in because it is all over the place. If you go by its past history, we have seen several breakouts that did not really work out. I would rather be sceptical about Axis. Although the chart structure is quite strong, it is trending above Rs 570 which is the next major technical support area. I think one should rather wait and watch and if the results play out. it is only then that should one look to buy or sell Axis Bank.
ET Now: What about Jubilant Foodworks? There is obviously earnings backing the momentum on the stock, there has been a 17.8% same store sales growth that they have seen, a huge jump in decades. Do you think there is any more steam left on the stock?
Kunal Saraogi: I would imagine so, I think it has got a tremendous chart trajectory and it is completely unrelated to the market. It is not correlated to how the market does. This stock is definitely headed higher. My own first target is about Rs 2,200 although I see the stock going much beyond that. So Rs 2,500 in the medium term, Rs 2,200 in the near term is possible here. One should definitely look to buy this.
ET Now: Take Indiabulls Housing. Given the kind of move that we have seen from banks as well as financials in the week gone by, do you sense that this is a stock which could continue to see some momentum or would you again say that wait and watch for the earnings and then take a trade?
Kunal Saraogi: Notwithstanding that there is a resistance for this one at around Rs 1350, one should definitely look to buy Indiabulls Housing probably from a longer term perspective.
If you take a medium term bet, definitely the stock is headed higher and possibly Rs 1600 is also gettable here if you wait long enough. I think definitely can be bought.
ET Now: What is the take on Maruti? Though this has been the darling of the street, it is almost becoming the bluechip paper or it already is much like HDFC Bank. Would you say that if there is any dip on account of a margin pressure on the earnings, it should be bought straightaway?
Kunal Saraogi: I would think so. It is a stellar performer, it is an outperformer. Being a large-cap stock, it is difficult to buy it at these levels but it is definitely headed towards Rs 11000 and possibly even to Rs 12000. One should definitely buy it. It has been cornered completely by the larger very strong hands. I think Rs 12,000 is in the offing for this one.
ET Now: A word on Gruh Finance as well given the kind of breakout that one saw on the stock on Friday. The numbers were clearly supportive of this move. After a 40% appreciation in seven days, the market clearly was anticipating a very strong set of numbers. Where does this stock go from here?
Kunal Saraogi: Very hard to say. The stock is in unchartered territory, it has gone up 40% in seven days. It is very tough to take a call here but given the momentum, definitely Rs 802 is possible here. Any number is possible but one should be slightly cautious at these levels.