The 15,000 mark is here for the Nifty 50 benchmark, although we could not quite hold on to it. What next are you mapping on the Nifty?
So it is a year and a month of landmarks for the indices. First, the S&P BSE Sensex index took out the 50,000 mark, and now the Nifty hit 15,000. Let us just hope that this uptrend would probably continue for at least some more time before we go into a bit of a pause. But this week was a completely stellar kind of week for the markets. It was not just the index price moves, but also the kind of ferocious upticks which you saw into stocks. It was as if the bulls were just let loose in the markets in many individual stocks. So I do not remember last time seeing SBI up 10% right at the open, which we saw on Friday. So, I think, that was a bit of a rare sight to see. After budget as well, I think the markets got back into the thick of buying frenzy. As you mentioned correctly, except for the Nifty IT index, which underperformed but still closed in the positive territory, you still have so many of the other sectors and stocks that look attractive, whether it is metal or realty stocks or PSU banks. Even the private banking stocks like ICICI Bank as well managed to hit back and make fresh highs for themselves. So, I think, the markets are abuzz with a lot of stock-specific action, and I think that adds to a lot of positivity for traders who are looking out for stock-specific price action. So, whether you are riding momentum which is there in specific pockets of stocks and sectors, or looking at playing contrarian strategies… For example, what happened with pharma names. I think Dr Reddy’s was down some 20 per cent or 25 per cent, if I am not wrong, from its 52-week high. Look at how the stock has managed to recover. The same has been the case with many of these other pharma names which were going through a recovery. So, all in all, I believe it was one of the much better weeks for the markets, not because of individual, specific stocks, but also I think an all-round performance in the market, led, of course, by the PSU banking stocks and the Bank Nifty overall.
Auto stocks have emerged once again as a theme that has held out. We have seen the moves on Tata Motors before Friday, which is when the markets did cool off. For instance, Apollo Tyres, Balkrishna Industries were the stocks that we have been discussing regularly. But where can one still go long? Where do you feel there is still room to make further money?
So, there should be Tata Motors, which should be on top of the list. I think even M&M, which has been a big underperformer in last 3-4 years, is also trying to come back to its prime mode. The stock has been trading very close to the Rs 800-840 mark, and looks fairly attractive. And there is this renewed vigour, which is clearly visible in those non-prime F&O stocks. There, we used to always limit our discussion whenever we discussed the auto pack, in particular large-cap names such as Hero MotoCorp, Bajaj Auto and, maybe, Maruti. The markets have given cognizance towards the other underperformers and given them more impetus. Look at the price actions that have happened. So, this is a clear indication that the long-term trend and trajectory for these stocks is set on the upside. Now, what happens is as an ideal strategy. Do you really buy momentum into these names or look out for phases where these stocks go through a silent correction, and come back to some mean retracement or support level and then look to enter? I think the latter could be a much better strategy. So there is a need to identify themes. I think Tata Motors and M&M are ideal candidates for a much long-term trend on the upside. But then, if you try and use corrections like what happened last week; if I am not wrong, Tata Motors was at Rs 265-270 levels and had gone through a 10 per cent correction… If there is a period of 10-15 per cent correction, which happened into these names, that should be a very good buying opportunity or at least an averaging opportunity for someone who probably has been holding on to them for a long time at much higher levels.
What exactly are your top ideas for the next week?
Well, I will be recommending a couple of buy calls, and the theme has now shifted towards a few high-beta and low-beta pockets. So I am suggesting the first one, which is a ‘buy’ on Graphite India. That stock has shown very good momentum. I think last week, especially on Friday, we saw the stock closing at its highest point of the week as well as of the day. The momentum has been extremely strong. Look at the weekly charts, and there are some strong indications of breakouts on the weekly charts for Graphite. So I for one believe that positionally, the stock should be in line for breaking even that Rs 440-450 mark as well. But from a very near term view, I think traders could look at a potential target of Rs 400 on Graphite. I would suggest a ‘buy’ with a target of Rs 330 in the near term. The second would be a slightly lower risk kind of name. As I was discussing earlier that many of the pharma stocks made a very strong comeback. Lupin was one of the stocks that were also in line for making a very strong comeback. The stock, which apparently fell almost 10 per cent after earnings, has already retraced more than 61.8 per cent, which is a classic demarcation that it has ended its correction, and is now resuming a trend on the upside. So, I think, Lupin could be a stock which could be in focus over the next 1-2 weeks. I would suggest a ‘buy’ with a target of Rs 1,150 and a stop loss could be kept at Rs 1,020.
