This week the market actually moved in tandem with what the rest of Asia was doing. There was a Chinese crackdown on education, tech and property stocks whose effect trickled into the Indian markets as well. So how’s the market looking like going ahead? Do you think the Nifty will be able to surpass the 15800- 15900 levels anytime soon?
If we look at the Indian markets as compared to the other world markets like Asia, US or the European markets there has been slight underperformance.
If we see the US market especially S&P 500 or Dow Jones there was a small consolidation after which we saw previous highs being crossed leading to fresh highs. But that was not the case with Nifty as it had made a high of around 15950 and since has been struggling.
Yes, Nifty has been holding on to 15600 levels quite tightly but when the world markets are at high levels they tend to create some amount of confusion for the emerging markets and that is what is happening in Indian markets as well.
The strength in the US market is not letting Nifty or Bank Nifty fall to a great extent but on the other hand, domestic issues are not giving a push to the Nifty to go towards the 16000 levels.
So in my opinion the Nifty’s range is still going to be around 15600-16000 levels. I would wait till it gives a close above 16,000 as then it will make more sense to be aggressive in Nifty otherwise stock specific action is what I would be looking for.
Which are the sectors that one can look at? We saw the Nifty Metal index outperform as it had a lot of global factors backing it due to which the index moved up 6% this week? Do you think the Nifty Metal index outperformance can continue in the weeks ahead?
If we look at the daily or the weekly charts for the Nifty metal index we will find that it has moved vertically. But the main interesting aspect lies in the hourly charts where we see the Nifty metal index witnessing a very strong upside and then having small consolidations. It saw small dips and then it kept on revolving and rotating around a small range on hourly charts.
In my opinion we can see some more upside but I would not be too gung-ho about at least the F&O names in the metals space. They have seen a strong move and if traders have bought them then it is better to hold on to those gains. I think at this stage traders should avoid fresh entry because the support is much lower.
Wanted to get your take on some of these pharma names. Just after Dr Reddy’s numbers we saw a bit of weakness coming in pharma stocks. Do you think that the best is behind them or do we need to be very selective in how we approach pharma now?
If we see the last few quarters it is clear that along with the Nifty Metal index, it was the Nifty Pharma index which was one of the biggest driving forces of the market. We saw very strong outperformance coming after an extended period of consolidation. So in my opinion we can see some more upside.
If we look at the daily charts as well then the Nifty pharma index has been taking support at levels of 13500 to 13800. It has made a very positive candle predominantly led by Sun Pharma. There has been a smart bounce back not only in names like Sun Pharma but if we look at Cadila or
we can see good chart patterns being formed. Even the second rung names like Glenmark Pharma are retesting a very strong breakout. If it sustains Rs 575-Rs 580 levels then it can move 10-15% from the current levels.
So in my opinion there can be some more upside in the pharma names. But yes, we have to be selective because there are certain names which are still looking weak like Dr Reddy’s. I would still like to give it some more time before jumping on the bandwagon but some of the other names like Glenmark Pharma or Aurobindo Pharma can witness some more upside.