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When you look at the markets, what we are seeing shaping up now is the Nifty Metals. Month-to-date also seems like a good run-up that we are seeing in the last month as well from the 52-weeks low-clear recovery that has come in in the Nifty Metals. Firstly, what is your view on Nifty Metals?
All the stocks are firing up and I had been recommending metal stocks since almost one month so most of them are doing well. And I think it is just the starting because previously also stated that Dollar Index has internationally corrected from 105 levels to almost 100 levels. And further, if Dollar Index breaks support of 100, then it is in clear downtrend. So that would again create tailwind for the metal sector. And if you look at the charts also, they are looking very fantastic. Currently, Metal Index is trading at 6738 so there is more room for 10-30% upside over here till Diwali or till end of this year. So things are in very good shape and metal stocks are all poised for good bull run and markets also look quite good. Sector rotation is evident. But stock-specific rally will still continue. I do not think that bull market has ended.
Absolutely. But right now when you look at the markets also, look at the Nifty it did try to go at one point of time just a couple of weeks back. We were expecting 20000. Then it saw correction. And right now, the 19700 also does not seem to be very sustainable. Every time it touches that point and then you see a bit of a fall coming in there. So overall also, what is the view on the market? You did say less bullish, but when do you see it going past and sustaining some levels there?
There is some confusion on the index level because global picture is quite positive. But FIIs have been cutting their positions on the long side. They spread off thousands of contracts in the futures. They have created position and options also so that will create friction at 19700, and 20000 is going to be a stiff resistance in the short term.
There is also a possibility that market retests the important support of 19000 which was the breakout point. So you can see a zigzag moment in the market consolidation. But one thing is for sure, market will take one step back and will take two to three steps ahead. So the bets should be always on the bullish side in the current phase because market structure is good. Currently, consolidation is going to happen and the bias is on the upside.
Let us talk about IT stocks, Infosys, Tech Mahindra, Persistence, most of the IT stocks are witnessing good upside in today’s trade. Has the bottom been made? Is it fair on a risk-reward basis to start accumulating IT? And which are your top calls there?
I think IT has definitely bottomed out. Now, IT as a sector seems like a cash cow which will grow at 5% to 10% CAGR and not so aggressively, at least for the large-cap stocks like Infosys, TCS, etc. But mid-cap stocks can do well. If you look at the Nifty IT index, then definitely it looks bottomed out at 29,822. At these levels, it looks a buy and upside looks like almost 30,000 to 32,000. And I have not checked all the charts but Infosys looks good at the current level, 1352 and 1320 should be the stop-loss and 1400 to 1500 should be the target.
We saw Five-Star Business come out with very good results, hiking guidance and it rallied almost 10% in trade. Some of the NBFC stocks which you like, apart from Five-Star, what would those be?
I think in NBFC, I am not tracking very closely, but I like Chola Finance. So, that looks pretty good on the charts and that is the only pick right now which I have.
Anything in terms of top picks in the current scenario that you are picking up and looking at?
I am looking at most of the metal counters and I have one pick from the pharma sector. So, Laurus Lab came out with the results but the chart patterns are very bullish right now. So, Laurus Lab could be bought at Rs 358.55, Rs 330 should be the stop-loss and Rs 400 to Rs 430 should be the target. The second stock would be NMDC, which can be bought at Rs 115, Rs 109 should be the stop-loss, Rs 127 should be the target. Third one would be APL Apollo, which can be bought at Rs 1585, Rs 1430 stop-loss and Rs 1800 to Rs 2000 should be the target.
And last one, MMTC, this can be bought at Rs 37.35, Rs 34 should be the stop-loss and Rs 43 to Rs 50 should be the target.
Disclosure: that I have been recommending metal stocks to my clients since a long time so we have position in most of the counters. So, you may take advice of your investment advisor before taking any investment decision.
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