Market Tomorrow: Nifty, Bank Nifty Record Highs This Week But Exhaustion Takes Over | Your Trades

And to give us a fundamental perspective, we are joined by Ashi Anand. Also, Chandanthaparya is a derivative and technical analyst from Motilal Oswal and Ashi Anand is founder and CEO for IME Capital. Gentlemen, a very warm welcome to your trades. Firstly, a quick question on the technical front, Chandan nearly it's like a range. If you see on a though we hit a lot of records this week, we Nifty hit a record bang, Nifty hit a record for this week. But the range where we started nifty with close clearly or closely ended on those points only 50 odd points of gain only. Is there a sign of exhaustion Now What do you see that the are we in for a consolidated trade for the coming week? How would you trade from here? Hi, thanks for having me. So we have noticed that Nifty has been moving in a broader range from last seven training session with support of 23300. It made a new lifetime high at 23666 but it closed near 23500 zone and quick on week basis is just up by around .15%. So we have seen a flat is close. But the good part is index managed to hold the support zone every small decline was being bought. So we believe that till it holds about 23300 zone measure trend could remain in tech and market has potential to reclaim the recent high of 23667 and then next rally to US 23750 two 24,000. So I believe that supply which is nearest lifetime is getting absorbed and that is very positive. And I believe in the next week if managers told the key support, the next leg of rally cannot be rolled out. But the good part is the Bank Nifty supported a load. Bank Nifty was up by around 3% and that contributed load for declining other heavyweights name in the Nifty. So I believe that till it holds about 23350, oral buy on decline could continue for the next lack of rally in the market. Alright Chandan, thanks for view coming in. So 23300 is a key level to watch out for according to Chandan Ashihai, welcome to the show as well. I'm going to ask you a question about the Indian IT PAC. Now I want to understand a lot changes for this after accidental numbers have come out. Slight bit of a miss coming in on that front. We have brokerage note saying that this could be a slight of a key positive for Indian IT but the recovery or the progress we could see here could be gradual and spread out overtime. What sense are you making of these numbers and more importantly the impact that it could have towards external facing IT sector? And if you were to play this sector, how would you do it? Would you still? Would you favour large caps over mid caps or what's your strategy when it comes to the Indian IT space? OK, First of all, thank you so much for having me on the show. In terms of the way we look at IT, right, What you have seen very clearly and I think you've seen this trend continue for the last two or three quarters is deal wins across IT companies continue to be very strong. However, revenue growth and guidances have been a lot weaker than expected. And this is primarily linked to discretionary spends actually being weaker now until you don't see a slightly broader US global economy. And I think what we're looking for is a rate cut cycle towards the end of the year, which could lead to some level of optimism around the economy and businesses coming back. You are likely to remain in this. Where discretionary demand continues to be weak or you have seen that in essentials numbers. I think we will see it in overcoming quarters well, but until you do not see discretionary demand only coming back, the space makes us struggle to perform. But I think the core part is that the moment you are seeing signs of a global economic recovery and improvement in sentiment in terms of businesses willing to spend on it, this is a pack which has underperformed quite significantly over the last couple of years. Valuations are very attractive. The longer term growth prospects are very strong. These are very high quality companies in terms of Roes quality, the balance sheets, qualities of management etcetera. So it is a space that I think towards the end of the year could become quite interesting. But you do need to see discretionary demand starting to come back. Discretionary demand started to come back. OK, Ashi, stay with us, Chandan, I'll come back to you. Chandan, since we saw that the FIS long and short ratio has improved significantly. Now we're more than 50% long from FIS and this week itself, of course, on the on the back of the blocks because the whole week streets are some 20,000 crore of block. But then we did see FI buying also on one day that was more than 7000 crore and now they've started to turn buyers. How's the data looking like in terms of FNO also? Yeah. So if you look at the FI long short ratio, this is working well in the Indian market. If I look at the historical data of last two and a half, three years, then the ratio goes near 10 to 15% on the lower side and on upside it goes to 7075%. And just couple of days big, the ratio of FI long short ratio was 12 to 13% and now turned to 50%. So that clearly indicates that FI is covered their short positions. So short covering trigger was there. They built some low position also after a long time. So some of it seems that sentiment is changing and that may support the Indian market. As of now the SIP and the flow from the DIS were supporting the market and now if FIS do the shortcoming then further Lego really could be seen. We have monthly expiring in the next week and we have seen some short built up in key indices and Stokes, but market recovered well from the lower levels. So those short covering could happen in next 2-3 days and that also helped the FIS long sort ratio to improve. So I believe with the FIS long sort ratio turning higher, there's the chances that short covering could trigger and market has potential to reclaim the recent ties and extend the relief to US 24,000 plus. So alright, Chandan, thanks for the view. Coming in 24,000, that's the level that you know we're all hoping to see on the index very soon. But gentlemen, stay with us because we'll slip into a very short break on this edition of your trades. We'll be right back to keep it going with more on the week that was and what to expect with the one that's up ahead stadium, the markets ahead. Actually I wanted to understand in specific sectors also auto has been in the Top Gear for last so many months. But then we did saw some pressure this week and majorly because of lot of action from the primary market and may be some profit booking. But then how to tread the sector from here because we already we are the sector is trading above its five year average. We understand the reasons like SUV, which has that's one choice, which has spurred the volumes and now rural demand also coming back in two Wheeler tractors. How should one approach can we have a, can we have a unanimous approach for the entire basket? We need to be selective for different spaces. How would you advise investors here? So I think when you come to auto right, the view needs to be a bit nuanced and the view say, for example, is quite different in terms of a short term perspective versus a longer term perspective. So if you're just seeing what auto has done over the last three-year, right, and momentum, which is possibly expected to sustain in the current year, this is actually being driven by a demand recovery that you're seeing off kind of COVID lows. Last year, auto numbers were pretty strong. You are expected to kind of with the rural economy coming back, potential consumption kind of stops in the budget. I think auto demand is expected to remain reasonably solid. And from that perspective, auto could continue to perform in the current year. Now within auto, you probably need to cherry pick in terms of what segments you're looking at. So say for example, if you're trying to play the rural recovery, someone like a Hero Motors may be a better place. I think 2 Wheelers is a space which could see a little more interest in terms of the overall recovery. However, when we the moment we look at auto, we are a bit concerned from a longer term perspective. The main threat here is that the whole transition towards EV is really going to change profitability dynamics for the sector. Market shares could shift quite significantly. You may have new players emerging now. What the shift towards EV is going to do towards the profit pool and who the winners are I think is not very clear at this point in time. So the moment auto companies are trading at higher valuations, we start getting a bit concerned that you are not really factoring in this longer term disruption risk. So really at this point in time, we tend to look at auto more as a cyclical recovery play as good as compared to a longer term fundamental holding. Alright, so that's the view coming in on autos from Ashi. But Chandan, I'm gonna come to you. Let's keep on going with the sectoral discussion. And I want to ask you about FMCG. Lots of triggers when it comes to this sector. You have some recovery in rural demand that's being penciled in going ahead. Individual company commentaries have also been positive when it comes to rural demand. You also have the MSP and kharif crop that has been hiked and significant FMCG players are not only FMCG players. You have banks, you have NBFCS, you have a whole host of sectors that have to some extent some sort of an Agri exposure. What are you penciling in when it comes to rural demand recovery? Do you think it is a gradual story? Do you think it is just from the corner and what is the impact going to be on FMCG stocks? It's a nice question but first if I reply on FTFMCZ on technical front, then we witnessed some profit booking decline in last two weeks. I remember on 5th of Jan, most of the FMCG stocks have really dwell. In fact the Nifty FMCC index itself headed by five 6%. But after that profit booking is clearly visible and most of the FMCG name is finding some supply pressure. Whether we talk about ITC FM or Hindustan Unilever or name like Colgate, Dabur or Gode's property, most of the FMCG name witnessed some profit booking in last couple of days. But I believe that entire consumption team could continue to be in the Indian market. So this decline could be both. If I look at the price behavior, we have seen a corrective move of almost 6 to 7% from the recent top and that provides a better opportunity to go with. So what I'll do, I'll go with the name like Tata Consumer in the FMCC space with the view that this recent decline provide the bargain buy. Technically speaking, it is corrected from 11 sixty 2082 levels and near 1070 it provides the Best Buy. So one can buy with support of 1025. And again Tata consumer can see a range bound bias and up move to US 1160 eleven. But if you ask me to focus on the consumption theme, I think we should focus on the monsoon or FMCC or some auto name. So I'll focus more on the escorts with the theme that some monsoon related companies could be in focus. So I believe counter like escorts or if you purely go with FMCG then Tata consumer or name like Godrej consumer product could provide some bargain buying after the recent decline of last two weeks. So you wanted to play a rural theme as well as rural theme combined with the auto rural theme combined with FMCG. OK. So in that case, Chandan, tell help us, how would you trade in financial and banking sector because the kind of move we saw this whole week, especially led by the private banks and of course they were under owned valuation comfort was there fundamentally they're improving asset quality, improving all the triggers. Now is the entire story baked in or we can see some more gains coming in for the coming week For financials, would you trade in private banks, Oregon PSU banks I segment, it was the buzzing during the week when Nifty was flat. Most of the like Nifty Funds Financial and Nifty Bank were doing well. So Nifty Funds Financial index is up by around 2 1/2% and if you look at the Nifty Bank that also delivered the gains of around 3%. So that clearly indicates some more performance is visible in both the index. I'll focus more on the private bank. So if you look at the price behavior of Axis Bank that looks quite promising. It has already seen the strong spot in last 3-4 days holding well about 12:30. So Axis Bank could be one name in the private bank with support of 12/10 which can accelerate this move to as 12 eighty 13111. If I need to focus on financial name, then I believe one can look at the name like Chola friends. We had some sort of buying code visible. Major trend is in tech higher base is clearly visible with support of 1340 zone. So access being other private, being few financial companies could be in focus and I believe some sort of relative strength in this sector rotation could help these sector to perform. I can also focus on ICICI Bank with the view that already has seen a decent consolidating move of last seven weeks and a small follow up above 11601165 could start the next leg of relief in private bank like ICICI Bank. Thanks for the view coming in, Chandan. Ashley, I'm going to shift focus to you, tell us how you are navigating the markets next week. What are your stock specific ideas that you'd like to share with our viewers? So, so we are longer term EMS, right? So we, it's not really a week to week. But I think the key thing that we are looking at in terms of the coming year is we're really focusing on the upcoming budget to just kind of understand is how big is a change in the government expenditure so far you've had year after year capital expenditure actually outpacing revenue expenditure. I think given the kind of election results, there is expected to be some kind of a shift out here. Now in terms of if you look at the last year, you had certain sectors right, namely real estate, capital goals, anything infra related, railways, defence. It was certain sectors or certain segments of the market which are largely driving the overall market. And a lot of the earth wide heavyweights, a lot of the consumption names, a lot of banking ID all of these really underperformed quite significant. Are we really looking at the kind of budget to understand is there any change in tone and therefore would you see some kind of change in terms of the market performance drivers over the current year? What we do kind of expect at some level is that as compared to last year where there was a big divergent between the all of the capital form, capital formation related parts of the market really driving overall market performance and big Lagarde. We expect this year to be a lot more balanced, but we expect to really get signs and sense on this in terms of the budget. And I think that will really Dr. portfolio positioning at this point in time we are having, we are, we've taken a balanced view. We've got enough investments across both of these pockets. And I think portfolio positioning will emerge as we get greater clarity on how the new government's policies are going to shape up. So we have two votes coming in for escorts at least as she also likes the Scots and Chandan also already gave his go ahead for escorts. Chandan, you want to add some more picks here, some trades which our viewers can bank on for the coming week? Yeah, I can again discuss about escort. Are we positive on the Nifty auto? And I think this is the time for monsoon and I'm sure most of the viewers will enjoy their weekend with monsoon in most of the part of the country. So if I look at the price waiver, this stock is really doing well. One of my preferred name from last couple of quarters, it has been making high tops, higher bottom on the weekly chart. After the consolidating move last five days again it started the positive move with good or decent trading and the delivery volume. So I believe the momentum could extend here and it could be the one of the name which can outperform the broader market. So with support of 4200 to 40 to 45, we are expecting it really towards 4500 to 4715. The Escorts second trade, we can focus on the Bharti Airtel. We believe that selective telecom companies could do well again. The index rebalancing was also the reason major trend is positive and we have noticed that whenever this store corrects by more than three to five days, immediately it witnesses buying interest because technically it is it is holding well above its fifty day exponential moving average. So major trend is positive and the small profit booking decline of last five days provides a fresh leg of buying interest. We have seen a surge in trading volume which clearly indicates the bargain buy. So Bharti Airtel could be other name with support of 1385. We are expecting fresh run up to us 1475 to 1500 level. So escorts in Bharti Airtel could be two preferred pick in auto and telecom Major Chandan. So well, lots of positively coming in on South calls. Gentlemen, thanks so much for joining us Chandan as well as Ashley on that. No, we're going to let you go. If you like this video then like, share and subscribe to ET Now.