Nifty & Bank Nifty positive in medium, short-term; buy on dips: Somil Mehta
Somil Mehta
, Head of Alternate Research,
Mirae Asset Sharekhan
, predicts a continued uptrend for both Nifty and Bank Nifty. The immediate target for Nifty is 24,500, a crucial level representing 61% recovery from the past six months' decline, with 24,800 as the subsequent target.
Bank Nifty
is expected to outperform, aiming for 56,000 in the short term.
Nifty today managed to break past the psychological level of 24,000. We are trading at the highest point of the day. Nifty Bank is surging in all cylinders, leading the rally. What are the levels that you are working for as far as Nifty is concerned and also the Nifty Bank?
Somil Mehta:
Yes, the rally has been amazing and it has been making higher tops and higher bottoms. All the sectors are looking great. The sectors which were lagging have started moving up as well. Like auto, IT has just started the move. I do not see Nifty breaking anywhere or having any breaks in the short term. The next level to watch out for is 24,500 and once we cross 24,500 the next level would be 24,800. So, 24,500 is the 61% of the entire fall which we saw in the last six months, so that is the next level to watch out for.
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Bank Nifty has outperformed and I will be expecting Bank Nifty to continue the uptrend and the next level to watch out for Bank Nifty is at least 56,000 in the very short term, in the medium-term outlook maybe there will be a small correction and then again the uptrend will resume. Medium-term, short-term both positive for Nifty and Bank Nifty and buy on decline should be the strategy.
Within financials, what is your pecking order looking like because the private banking names are doing well, but do you believe that now is the time to look at some of the PSU counters as well?
Somil Mehta:
Of course, PSU banks have done well in the last couple of months and I am expecting Bank of Baroda, South Indian Bank, smaller banks Can Bank, SBI all of them are looking great. SBI has already moved up, but if you see Bank of Baroda, Canara Bank, PNB these counters are still there is a lot of room upside down. So, from here, I will be expecting at least 5% to 7% from these levels in the short term.
What are your top picks? What are your long positions in this market? What are the pockets of value and what
stocks
are you picking out for us today?
Somil Mehta:
I am picking one of the stocks from auto. As I said, auto has started revving up now and if the markets have to go till 25,000, then autos will have to participate.
Bajaj Auto
would be my top pick and the stop loss would be Rs 8,000, the targets are Rs 8,650. It probably would go above that but at this point of time, 8,650 would be my target.
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The next stock I am picking is
Federal Bank
from the banking side, which has great momentum at this point of time. The stop loss would be Rs 195 for Federal Bank and the target would be 215 in the short term.
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